A U.S. District Judge has indicated that a jury will likely decide whether artificial intelligence giant OpenAI 'hoodwinked' its co-founder, Elon Musk, during its transformation from a nonprofit research lab into a lucrative enterprise now valued at $500 billion. On Wednesday, U.S. District Judge Yvonne Gonzalez Rogers made it clear, without issuing an official ruling, that she intends to deny OpenAI's motion to dismiss the 17-month-old lawsuit filed by Musk against the San Francisco startup he helped establish in 2015.

During a contentious 90-minute hearing in Oakland, California, Judge Gonzalez Rogers emphatically stated, "This case is going to trial." While she still needs to finalize trial logistics and consider dismissing unjust enrichment claims Musk made against Microsoft – which holds a $135 billion stake in OpenAI's for-profit subsidiary established in 2019 – the judge informed lawyers there is sufficient evidence for a jury to deliberate. This legal battle pits Elon Musk, the world's wealthiest individual with an estimated $713 billion fortune, against OpenAI CEO Sam Altman, whose fortune is currently pegged at $2 billion. Both billionaires are expected to be called to testify under oath if the trial proceeds, with the judge noting, "Part of this is about whether a jury believes the people who will testify and whether they are credible." The trial's scheduling remains undetermined.

The lawsuit centers on OpenAI's origins as a nonprofit research lab launched by Musk and Altman in 2015. Their stated mission was to develop artificial intelligence primarily for the benefit of humanity, intending to serve as a counter to profit-driven AI development by companies like Google, which they believed might deploy the technology recklessly in pursuit of profit. Musk contributed substantially, including $40 million, largely through donor-advised funds, and four Tesla vehicles.

Evidence suggests a subsequent falling out between Musk and Altman regarding OpenAI's future. Musk reportedly grew suspicious that Altman and another OpenAI executive, Greg Brockman, were conspiring to convert the research lab into a profit-seeking entity. Despite Altman's reassurances of his commitment to OpenAI's nonprofit mission, Musk eventually severed ties with the startup and later launched a rival AI company, xAI, which recently secured a $230 billion valuation.

A 2017 diary entry by OpenAI's Brockman was cited by Judge Gonzalez Rogers as support for allowing Musk's lawsuit to proceed. Court filings reveal Brockman mused about his ambition to become a billionaire, writing, "We’ve been thinking that maybe we should just flip to a for profit. Making the money for us sounds great and all." Furthermore, OpenAI's own board of directors had significant reservations about Altman's motives, leading to his temporary firing in 2023, before his swift reinstatement as CEO, an event partially orchestrated by Microsoft.

A critical issue before Musk can pursue fraud claims at trial is determining when the alleged deceit occurred, due to a three-year statute of limitations on such claims. Judge Gonzalez Rogers indicated that she would likely allow a jury to first determine the timing of the alleged fraud against Musk. If it is determined that the suspected deceit began within three years of Musk's August 2024 lawsuit filing, the trial would then move forward to address the fraud allegations.