Judge drops fraud claims in Musk’s case against OpenAI

U.S. District Judge Yvonne Gonzalez Rogers dismissed fraud and constructive fraud claims brought by Elon Musk against OpenAI, CEO Sam Altman and president Greg Brockman on Friday in federal court in Oakland. Jury selection begins Monday and opening statements are expected Tuesday.

The ruling narrowed a lawsuit that originally included 26 claims when Musk filed in November 2024. The judge left two counts for trial: breach of charitable trust and unjust enrichment.

Breach of charitable trust alleges the nonprofit’s assets or purpose were diverted from its stated charitable goals. Unjust enrichment seeks to recover profits that a plaintiff argues were gained improperly after a change in structure.

Musk’s complaint says OpenAI was created as a nonprofit in 2015 to develop artificial intelligence for public benefit and that founders promised the organization would not prioritize private gain. He alleges OpenAI set up a for-profit arm in 2019 after he left the board and that the restructuring violated the nonprofit pledge.

Musk is seeking roughly $150 billion in relief that he says should be returned to OpenAI’s nonprofit entity rather than awarded to him. He also asks the court to remove Altman and Brockman from their roles and to undo the restructuring that created the profit-making arm.

Attorneys for Musk had asked before trial to drop the fraud counts to narrow the issues for jurors and focus the case on whether OpenAI still serves the public or has become a private enterprise. The judge’s order removes the fraud allegations from the jury’s consideration but leaves the trust and enrichment claims.

OpenAI called the lawsuit baseless and posted on X that it was a “harassment campaign driven by ego, jealousy and a desire to slow down a competitor.” Musk has posted criticism of Altman on X; Altman posted he was “really excited to get Elon under oath in a few months, Christmas in April!”

The for-profit business created from OpenAI’s arm is valued at more than $850 billion. Musk has since launched xAI and later combined it with SpaceX in a deal the parties say values the merged business at about $1.25 trillion. Both sides are pursuing major market plans: SpaceX is preparing for a potential public listing, and OpenAI has explored a possible initial public offering later this year and listed the lawsuit as a business risk in investor materials.

The case is one of several legal disputes involving the parties. X and xAI filed an antitrust suit against OpenAI and Apple in 2025; a Texas hearing in that matter is set for May. A separate trade-secret case by xAI against OpenAI was dismissed by a federal judge in California in February.

The Oakland trial will determine whether jurors find that OpenAI’s change in structure violated fiduciary duties to its charitable purpose and whether any gains from that change should be returned to the nonprofit entity.