The high-stakes legal battle between Elon Musk and OpenAI is officially heading to trial after a California federal judge rejected Sam Altman’s attempts to dismiss the case. US District Judge Yvonne Gonzalez Rogers declared during a Wednesday hearing that “this case is going to trial,” citing sufficient circumstantial evidence to warrant a jury trial scheduled for March 2026.
Musk’s lawsuit, filed in 2024, accuses OpenAI and CEO Sam Altman of fraudulently misleading him about the company’s commitment to its original nonprofit mission. The Tesla CEO claims he donated $38 million to OpenAI based on assurances that the organization would develop AI for the benefit of humanity, not corporate profit. Musk alleges that OpenAI’s pivot to a profit-oriented model, particularly through its partnership with Microsoft, constitutes a breach of those promises.
The lawsuit seeks monetary damages and aims to void Microsoft’s licensing agreement with OpenAI. Judge Rogers indicated there was compelling evidence that “assurances were made, and promises made, that the structure would be maintained,” while noting “there was lots of information that was not shared” with Musk.
OpenAI has vigorously denied the allegations, with lawyers arguing that Musk was aware of for-profit plans as early as 2018. The company maintains it is still controlled by OpenAI’s nonprofit arm and characterized Musk’s lawsuit as “baseless” and part of his “ongoing pattern of harassment.” An OpenAI spokesperson emphasized the company remains “focused on empowering the OpenAI Foundation, which is already one of the best resourced nonprofits ever.”
This isn’t Musk’s only legal action against his former company. His AI startup xAI filed a separate lawsuit in September 2024, accusing OpenAI of stealing trade secrets and targeting xAI employees for recruitment. Musk co-founded OpenAI in 2015 but departed in 2018, citing potential conflicts with Tesla’s AI ambitions. He has since become one of OpenAI’s most vocal critics, launching xAI in 2023 as a direct competitor.
Steven Molo, Musk’s trial attorney, expressed gratitude for the court’s decision, stating they look forward to “presenting all the evidence of the defendants’ wrongdoing to the jury.” The March trial promises to be a landmark case examining the governance and mission drift of one of the world’s most influential AI companies.
Key Quotes
This case is going to trial. I think there’s plenty of evidence. It’s circumstantial, but that’s how these things work.
US District Judge Yvonne Gonzalez Rogers made this statement during the Wednesday hearing, signaling her belief that Musk has presented sufficient evidence to warrant a full jury trial against OpenAI and Sam Altman.
There were assurances made, and promises made, that the structure would be maintained. There was lots of information that was not shared.
Judge Rogers elaborated on her reasoning for allowing the case to proceed, suggesting that OpenAI may have withheld critical information from Musk about its plans to shift from its nonprofit mission.
Mr Musk’s lawsuit continues to be baseless and a part of his ongoing pattern of harassment, and we look forward to demonstrating this at trial.
An OpenAI spokesperson dismissed Musk’s allegations, framing the lawsuit as part of a broader campaign of harassment by the Tesla CEO against his former company.
We’re grateful for the court’s decision. We look forward to presenting all the evidence of the defendants’ wrongdoing to the jury.
Steven Molo, Musk’s trial attorney, expressed confidence following the judge’s ruling, indicating they believe they have strong evidence of misconduct by OpenAI and its leadership.
Our Take
This trial represents more than a personal feud between two tech titans—it’s a referendum on AI industry ethics and governance. Musk’s $38 million investment claim and allegations of deception strike at the heart of how AI companies communicate their missions while pursuing commercial success. The timing is particularly significant as AI regulation intensifies globally and public scrutiny of Big Tech-AI partnerships grows. Whether Musk’s motivations are purely principled or strategically competitive (given xAI’s rivalry with OpenAI), the case will force unprecedented transparency into OpenAI’s internal decision-making. The March trial could reshape how AI startups structure themselves and manage stakeholder expectations, potentially influencing everything from nonprofit governance to investor disclosures. Regardless of the outcome, this legal battle will likely accelerate conversations about AI accountability and mission alignment in an industry moving at breakneck speed.
Why This Matters
This legal showdown represents a pivotal moment for AI governance and corporate accountability. The case raises fundamental questions about how AI companies balance their stated missions with commercial pressures, particularly as they transition from nonprofit to for-profit structures. With OpenAI valued at over $150 billion and positioned as a leader in generative AI, the trial’s outcome could establish important precedents for transparency and fiduciary responsibility in the AI industry.
The dispute also highlights the intensifying competition and personal rivalries shaping AI development. Musk’s allegations, if proven, could damage OpenAI’s reputation and potentially disrupt its Microsoft partnership, which has been crucial to scaling ChatGPT and other products. For the broader AI ecosystem, this case underscores tensions between open, mission-driven AI development and the massive capital requirements needed to compete at the frontier of AI research. The trial will likely reveal internal communications and decision-making processes that could inform how future AI organizations structure themselves and communicate their missions to investors and the public.
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Source: https://www.businessinsider.com/judge-rejects-sam-altman-efforts-toss-elon-musk-case-openai-2026-1