The Fig Leaf on the $850B Empire

The jury in Elon Musk's blockbuster lawsuit against OpenAI took less than two hours on Monday to dismiss every claim against the company, delivering a decisive defeat to the world's richest person in a federal courtroom in Oakland. The nine-person jury rejected both charges: breach of charitable trust and unjust enrichment. Judge Yvonne Gonzalez Rogers will issue the final ruling, but the advisory verdict effectively ends a case that sought to dismantle OpenAI's $850 billion corporate empire and remove Sam Altman as CEO.

Musk's legal theory was always a stretch. He argued that the $38 million he donated to OpenAI in its early years funded a nonprofit lab devoted to safe AI development for the benefit of humanity, and that Altman and Greg Brockman betrayed that mission when they restructured the company into a for-profit enterprise that has attracted billions from Microsoft, Amazon, and SoftBank. The relief he sought was sweeping: Altman's ouster, reversal of the for-profit conversion, and a return of up to $150 billion, according to France 24's live coverage of the trial.

The legal odds favored OpenAI throughout. A finding of liability on either charge would have been a surprise. Altman's lawyers mounted a clinical case that Musk's claims fail on multiple legal standards: the donation didn't meet the bar of a charitable trust, the statute of limitations likely bars damages, and the documentary evidence is thin. The defense raised Hershey as an example of a charitable trust that controls a highly lucrative business.

But the trial was never really about the law. It was about Sam Altman's character.

Musk's attorneys made credibility their centerpiece. In closing arguments, attorney Steven Molo told the jury that believing Altman is a prerequisite for the defense to win. During cross-examination, Molo pressed Altman on how others perceive him, according to AP News.

"You've been repeatedly called deceptive and a liar with people you have done business with?" Molo asked.

"I have heard people say that," Altman replied.

The courtroom sketch artist told Vanity Fair's Tom Dotan she found Musk harder to draw than most subjects — his features lacked the distinctiveness that makes for a recognizable sketch. Altman, she said, was easier: his Tintin-like hair and perpetually furrowed brow were vivid. He looked like he's always anxious, she observed.

The character testimony went beyond the courtroom. A board member quoted in Ronan Farrow's recent New Yorker profile said Altman had a "sociopathic lack of concern for the consequences that may come from deceiving someone," Dotan reported. That board member has since left. So have most board members who voted to fire Altman in November 2023, with the exception of Adam D'Angelo.

Musk's own credibility was not immune from damage. During jury selection, many prospective jurors expressed strong antipathy toward him and his politics, NBC News noted. Shivon Zilis — a business associate with whom Musk has four children — testified about her role as an intermediary between the executives, and her account undercut parts of his narrative. OpenAI attorney Sarah Eddy noted in closing that even people who work for Musk struggled to support his version of events.

Judge Gonzalez Rogers appeared unimpressed by the defense's central argument. When Musk's lawyers claimed OpenAI abandoned caution by developing AI outside a nonprofit structure, she pointed out the irony: Musk created a for-profit company in xAI. "This entire trial is a gigantic irony," she told them.

The threshold question before the jury was procedural: whether Musk filed his suit within the statutory time limit. He sued in 2024, four years after his last contribution. The judge ruled the jury's verdict on this point advisory but said she would likely follow its recommendation. The jury's swift dismissal of all claims suggests it found the case time-barred as well.

The deeper question the trial surfaced is whether OpenAI's nonprofit structure was ever anything more than a formality. Time and again, OpenAI's lawyers described the organization as "the most well-funded charity in the world" while its parent entity oversees an $852 billion enterprise. Until a few months ago, the nonprofit itself had no employees, TechCrunch noted.

"Spend enough time covering Silicon Valley and you'll realize that many founders here believe the technology they're building is so beneficial to humanity they're effectively running a charity," Dotan wrote. "OpenAI is just one of the few that had the temerity — not to mention the vestigial corporate structure — to actually call itself one."

The jury answered what was asked of it. Judge Gonzalez Rogers will sign the papers. And Altman will keep showing up to court with furrowed brows — now knowing that the most scrutinized CEO in tech gets to keep his job, and the nonprofit that houses it was apparently always a formality, not a fiduciary check on the people running it.