Musk withdraws fraud claims against OpenAI

Elon Musk, CEO of Tesla, has reportedly withdrawn fraud claims against OpenAI and its co-founders Sam Altman and Greg Brockman, narrowing the scope of his lawsuit on the eve of trial.

As per reports, Yvonne Gonzalez Rogers, a US court judge, has allowed Musk to streamline the case, leaving just two claims, unjust enrichment and breach of charitable trust, out of the 26 included in his November 2024 complaint.

Jury selection is scheduled to begin on Monday in a federal court in Oakland, California.

Musk has alleged that OpenAI deviated from its founding mission as a non-profit aimed at benefiting humanity after securing billions of dollars in funding from Microsoft and transitioning towards a for-profit structure.

He is seeking damages of up to $134 billion, which he said should be directed to OpenAI’s charitable arm if he succeeds.

Musk has also requested the court to restore the organisation’s nonprofit status and remove Altman and Brockman from their leadership roles.

However, OpenAI, along with Altman, Brockman and Microsoft, has denied the allegations, calling them baseless and accusing Musk of introducing last-minute demands ahead of the trial.

The trial will proceed in two phases.

In the first phase, a jury will hear arguments related to the remaining claims and issue a non-binding advisory verdict.

In the second phase, the judge will decide on the remedies sought by Musk.

Musk co-founded OpenAI in 2015 but exited its Board in 2018. He later launched rival AI firm xAI in 2023, intensifying competition in the rapidly evolving Artificial Intelligence space.

Earlier in April, Musk sought the removal of Altman and Brockman as part of his legal challenge to the Artificial Intelligence firm’s shift to a for-profit structure, according to reports. In a court filing, Musk said his lawsuit aims to reverse OpenAI’s restructuring and restore its status as a non-profit research organisation.