On Monday, a nine-member federal jury in Oakland, California took less than two hours to dismiss Elon Musk’s lawsuit against OpenAI and its chief executive Sam Altman. Crucially, the jury did not rule on the core claims of the case. These included whether OpenAI, the company behind the popular artificial intelligence (AI) chatbot ChatGPT, strayed from its founding mission and whether Altman and OpenAI’s co-founder Greg Brockman enriched themselves at the expense of a charitable purpose. It decided only that Musk had waited too long to sue in relation to his core claims about breaches of a founding contract or breach of charitable trust.
A victory for Musk could have neutered OpenAI, which in turn would have probably sent shockwaves through the entire AI sector, given the company’s dominant position in developing the technology. Now, however, OpenAI has a clear path to take its next big step in the AI race, even though the key question at the core of the case remains unanswered: is OpenAI a nonprofit dedicated to humanity or a corporation dedicated to its shareholders?
OpenAI was founded in December 2015 as a nonprofit entity—an AI research lab. Musk and a group of prominent entrepreneurs pledged US1 billion to develop AI for the benefit of humanity, free of commercial pressure. Alongside Musk, the founding group included Altman, Brockman and computer scientist Ilya Sutskever. The organisation’s charter is committed to two key principles. First, developing artificial general intelligence safely and for the benefit of all of humanity. Second, developing the technology openly, meaning it would be open source. This would allow others to use their underlying models, code, and research freely. This was the deal Musk says he signed up for. And OpenAI claims it continues to honour this deal even today, despite more than $20 billion in revenue in 2025. Since 2015, a lot has happened. And understanding these events is key to interpreting the jury’s verdict.
By 2019, the original deal looked different. Given that training frontier AI models was extraordinarily expensive, Altman started to seek more cash. OpenAI created a capped-profit subsidiary where investors could earn up to 100 times their initial investment, with any extra money flowing back to the nonprofit parent. One of the first investors was Microsoft, which initially invested $1 billion and more than $13 billion over time. The nonprofit retained formal governance, the usual nonprofit rules applied, but the commercial subsidiary became the decision-maker.
That same year, OpenAI released GPT-2. The model was released partially, in stages, rather than published as open source. This was the moment the “open” in OpenAI began to read differently. GPT-3 followed in 2020, and it was available only via a paid subscription. The inner workings of the model also remained secret. ChatGPT launched in November 2022, and reached 100 million users in a few days.
Twelve months later, OpenAI’s nonprofit board fired Sam Altman, citing a loss of confidence in his candour. This was what the governance structure was meant for: to protect the organisation’s humanity-first mission, the board had the power to remove the chief executive. Yet, within five days, after pressure from Microsoft and the employees, Altman was back and the board was out. A new board that aligned with the commercially-driven enterprise took their seats. The mechanism built to keep OpenAI accountable to its charter was the one that lost. Whatever the “humanity claim” of the founding mission was supposed to mean, commercial interests prevailed.
OpenAI is now openly preparing for a public listing at the end of 2026, at an expected valuation at up to $1 trillion, even as it defends dozens of pending lawsuits, ranging from intellectual property infringement and consumer protection claims to a wrongful death suit. This is the part the jury did not address.
Musk has said he will appeal the verdict. The appeal court will almost certainly limit itself to a narrow legal question — perhaps when a reasonable plaintiff should have understood OpenAI had changed. The larger question about whether OpenAI is a nonprofit dedicated to humanity or a corporation dedicated to its shareholders, has now been deferred indefinitely. The public, however, will no doubt make up its own mind about a company now worth hundreds of billions of dollars.
The Conversation