Elon Musk Seeks Redistribution From OpenAI After U.S. Judge Yvonne Gonzalez Rogers Sends Jury

A U.S. District Judge Yvonne Gonzalez Rogers sent a nine-person jury off to deliberate on whether Elon Musk has proved his claims against Sam Altman, Greg Brockman and OpenAI, as well as Microsoft, their co-defendant, after “AFTER 11 DAYS OF TESTIMONY and hours of closing arguments.”

“In the hands of humans Week 3 analysis … and predictions AFTER 11 DAYS OF TESTIMONY and hours of closing arguments, U”

Local News Matters

The trial’s central question, as described by The Tech Buzz, was whether Sam Altman “can be trusted,” with Musk’s attorneys portraying “broken promises and mission drift” and Altman defending the transformation as survival.

Local News Matters

The Tech Buzz says Musk helped launch OpenAI in 2015 as a nonprofit research lab and contributed roughly $44 million in the early years, while it also says OpenAI created a “capped profit” subsidiary in 2019 and later took massive investments from Microsoft totaling over $13 billion.

In the courtroom, Altman testified that “We needed hundreds of millions, then billions of dollars,” and that “The nonprofit structure couldn't scale to meet the technical challenges we faced,” as Musk’s legal team pointed to emails and internal documents about commercial ambitions.

The Guardian framed the dispute as allegations that Altman, OpenAI and Greg Brockman broke a founding agreement by restructuring OpenAI into a for-profit entity after it was established as a non-profit in 2015, with Musk seeking “the redistribution of $134bn from its for-profit entity to its non-profit organization.”

Local News Matters says more than 20 witnesses testified and hundreds of documents were admitted in evidence, including testimony from the four founders of OpenAI: Musk, Altman, Brockman and Ilya Sutskever, as well as Microsoft CEO Satya Nadella and Shivon Zilis.

The same source reports that five experts took the stand with hourly rates ranging from $1,375 to $5,000 an hour, and that the jury will begin its deliberations on Monday with the goal of unanimously answering questions on the verdict form in accordance with the 17 pages of instructions given them on Thursday by Gonzalez Rogers.

TechCrunch

The Guardian describes how both Altman and Musk took the stand for hours and faced combative cross-examinations that painted them each as untrustworthy, while Musk’s attorney Steven Molo called Musk to testify for three consecutive days.

In Musk’s testimony, The Guardian quotes him saying, “it’s not OK to steal a charity. That’s my view,” and it also quotes Musk responding to OpenAI’s lead attorney William Savitt by saying, “Your questions are not simple. They are designed to trick me, essentially.”

TechCrunch’s Equity podcast coverage added that a closing theme in the final days was whether OpenAI CEO Sam Altman is trustworthy, with Kirsten Korosec saying, “It’s really come down to trust, because we don’t have the insight, necessarily — these are all privately held companies, there’s a lot behind the veil still.”

Local News Matters says the case is split into two phases, with the jury currently considering the liability phase and the questions relating to whether Musk has proved his claims and asserted them in a timely manner, while a second phase would determine damages and remedies if claims are both valid and timely.

“A nine-person jury is set to decide whether Elon Musk’s allegations of “stealing a charity” against Sam Altman and OpenAI are legitimate, with deliberations to begin in earnest on Monday”

The Guardian

That source also says Gonzalez Rogers charged the jury to apply a three-year limitations period to the first claim — breach of charitable trust — and a two-year period to the second claim — unjust enrichment, with Musk’s complaint brought Aug. 5, 2024 and claim cutoff dates of Aug. 5, 2021 and Aug. 5, 2022.

The Guardian reports that if the jury finds OpenAI is liable, the verdict could present “sizable difficulties” for the company, which is seeking to go public later this year at a valuation of $1tn.

The Tech Buzz adds that financial stakes are enormous, saying OpenAI is reportedly seeking new funding at a $100 billion-plus valuation and that a ruling against the company could complicate that capital raise or force structural changes to its capped-profit model.

In the Tech Buzz’s account of the stakes beyond the courtroom, it says the trial also exposed “uncomfortable questions about AI safety commitments across the industry,” including that OpenAI disbanded its superalignment team and that Google rushed out Bard to compete with ChatGPT despite internal concerns.