Musk loses OpenAI lawsuit, clearing path to potential $1tn IPO

TL;DR:

• A US jury in Oakland federal court has unanimously rejected Elon Musk’s lawsuit against OpenAI, finding the case was brought too late under the statute of limitations.
• The jury deliberated for under two hours after an 11-day trial, removing a major overhang on OpenAI’s potential IPO at a valuation that could reach $1 trillion (£800bn).
• Musk plans to appeal, but presiding judge Yvonne Gonzalez Rogers said any appeal would face “an uphill battle” given the strength of evidence supporting the verdict.

The verdict in Musk v OpenAI removes the single largest legal obstacle to OpenAI’s IPO ambitions. Musk had argued OpenAI, Sam Altman and Greg Brockman manipulated him into giving $38m, then attached a for-profit business to the original non-profit and took tens of billions of dollars from Microsoft and other investors.

The jury accepted OpenAI’s central defence: Musk had a three-year statute of limitations to sue, and his August 2024 lawsuit came too late because he had known about OpenAI’s growth plans years earlier. The Oakland jury reached its unanimous decision after under two hours of deliberation.

What the verdict actually settles

The verdict settles the procedural question (when Musk needed to sue) without settling the substantive question (whether OpenAI breached its founding mission). Marc Toberoff, Musk’s lawyer, framed the outcome as setting a “brand new formula for Silicon Valley” — nonprofits that grow into for-profits and make their founders rich. Musk himself wrote on X that “Altman & Brockman did in fact enrich themselves by stealing a charity. The only question is WHEN they did it!”

For OpenAI, the verdict’s practical impact is removing a multi-billion-dollar litigation overhang from a possible IPO. Dan Ives of Wedbush called it “a huge win for Altman and OpenAI despite the scrapes and bruises on Altman’s persona and leadership” — referencing testimony during the trial in which multiple witnesses questioned Altman’s candour and described him as a liar. SpaceX is preparing an IPO that could itself exceed OpenAI’s, sharpening the parallel paths of Musk’s and Altman’s businesses.

Microsoft, which faced an aiding-and-abetting claim, welcomed the verdict, with a spokesperson noting the company has spent more than $100bn on its OpenAI partnership to date.

Looking forward

For UK investors and institutional asset managers, the verdict materially changes the OpenAI IPO calculation. A trillion-dollar floatation — if it happens at that valuation — would be the largest tech IPO since Saudi Aramco, and UK pension funds, asset managers and FTSE-listed companies will have to decide on exposure positioning ahead of any filing. The verdict also reinforces a Silicon Valley pattern that UK regulators have begun watching: the conversion of charitably-structured AI labs into for-profit entities at very high valuations, often with limited transparency about how the underlying mission has changed. UK AI policy circles concerned about concentration of frontier-AI capability into a small number of dominant US firms will read the verdict as accelerating, not slowing, that consolidation. Musk’s xAI — now formally part of SpaceX — remains the competing US frontier-lab vehicle, and the practical effect of his appeal will be whether it constrains OpenAI’s IPO timing.