In a verdict reached in less than two hours, a federal jury in Oakland, California, dismissed the civil lawsuit with which Elon Musk had challenged OpenAI’s conversion from a non-profit into a for-profit company. The jurors focused primarily on the timing of Musk’s case, ruling that the world’s richest man had waited too long before turning to the courts.
The outcome significantly reduces the legal exposure of Sam Altman, CEO of the company that develops ChatGPT. The suit had threatened an estimated outlay of around $150 billion and the ouster of the company’s leadership. For the US entrepreneur, however, the victory has a bitter aftertaste: the statements that emerged during the trial — in which Altman is described in anything but flattering terms — are now public.
Why Sam Altman’s reputation is at risk
Weighing on the OpenAI founder were days of testimony in which former colleagues and other witnesses described him as an “unreliable executive”. During cross-examination, Musk’s lawyer cited the statements of eight witnesses, including Musk himself, according to whom Altman had allegedly misled or lied to third parties. The CEO replied tersely from the witness stand: «I believe I am an honest and reliable entrepreneur».
OpenAI’s chief legal officer told reporters this was a “character assassination” operation conducted by Musk’s team without supporting evidence. Speaking in court in Altman’s defense was Joshua Achiam, an OpenAI executive: «In all my direct experiences with him, I feel he has been honest with me». On the other side, the CEO’s personal credibility was placed at the center of the closing argument by Musk’s attorney Steven Molo: «Sam Altman’s credibility is directly at stake in this case. If you don’t believe him, they can’t win».
The testimony of OpenAI’s former chief technology officer
Among the exhibits introduced as evidence, one document stood out: a September 2022 memo written by former OpenAI chief technology officer Mira Murati and addressed exclusively to Altman. The document, titled “Feedback from Mira to Sam (only Sam had access)”, denounced an internal climate that was anything but calm: «The constant panic around our projects, people, goals, and so on generates chaos and turnover. We talk about focus, but in practice our approach is to do everything and do it fast».
In a video-recorded deposition shown to the jurors, when asked whether in the fall of 2023 she considered Altman an honest person, Murati paused at length before answering: «Not always», adding that the CEO had allegedly undermined her work by pitting executives against each other. Co-founder and former board member Ilya Sutskever also testified that he had spent over a year collecting episodes that, in his view, documented Altman’s shortcomings at the helm of the company.
Conflicts of interest at the center of the debate
Documents introduced during the trial also showed billions of dollars in investments by Altman in companies that have commercial relationships with OpenAI. For his part, the CEO maintained that he had always recused himself from decisions where potential conflicts of interest existed and that he had never deceived any counterparty. Board chairman Bret Taylor, who joined the body in late 2023, testified that Altman has always disclosed his positions, sending a detailed memo before the board updated its policy on the matter.
It is also worth remembering that in November 2023 the board had removed Altman from his post, questioning his leadership capabilities, only to reinstate him less than a week later thanks to the mobilization of nearly all of the company’s employees. OpenAI’s lawyers brought back into court the letter with which the majority of the staff had asked for his return.
What Altman’s defense argued
OpenAI rejected Musk’s narrative, describing the Tesla founder as motivated by a desire to take control of the company. According to the defense’s line, Musk had long been aware of the need to convert the company into a for-profit entity in order to raise the capital essential to developing artificial intelligence.
The defense also argued that Musk had slowed some of the funding he had promised and tried to fold the startup into Tesla — a scenario deemed incompatible with OpenAI’s original mission. In his testimony, Altman had said he felt that his “co-founder had not kept his promises and had put the company in a very difficult position”.
The fallout for the IPO
The trial victory removes the most significant legal obstacle to OpenAI’s stock-market listing, expected by year-end and estimated to be worth as much as $1 trillion, which would make it the largest IPO in history. As trial and AI litigation specialist James Rubinowitz put it: «This verdict removes the single biggest legal threat to a public offering».
Rubinowitz himself, however, added: «That said, even in victory, OpenAI emerges with the worst evidentiary record on its own governance now permanently in the public record. Every institutional investor reading this trial transcript is doing their own credibility analysis on Altman before putting money in».
On the competitive front, Musk’s defeat also weighs on the plans of xAI, the artificial intelligence startup of the Tesla founder, which is controlled by SpaceX. A win for the owner of X could have slowed OpenAI’s run and reshuffled the balance of power in the sector. The opposite outcome consolidates Altman’s leadership position instead, clearing the way for the plan to invest hundreds of billions of dollars in the data centers needed to power the next generation of models. The courtroom fight was settled in the CEO’s favor on the formal score, but the trial transcript is set to remain a reference document for anyone who has to decide whether to finance OpenAI’s next phase.
Editor’s note
This article was originally published in Italian on money.it by P. F. on May 20, 2026 as «Sam Altman ha sconfitto Elon Musk in tribunale. Ma ora la sua reputazione è compromessa». It has been translated and adapted for an international audience by the Money.it International desk.
