Judge Allows Elon Musk's OpenAI Lawsuit to Proceed, Trial Set for 2026
A federal judge in Oakland, California, has dealt a significant blow to OpenAI and Microsoft. On January 15, Judge Yvonne Gonzalez Rogers rejected their requests to dismiss a lawsuit filed by Elon Musk. The billionaire entrepreneur is challenging OpenAI's controversial conversion from a non-profit to a for-profit entity.
Musk Alleges Betrayal of Founding Mission
Elon Musk, the world's richest man and a co-founder of OpenAI in 2015, claims the company has betrayed its original mission. He argues that OpenAI was established as a public charity with a commitment to openness and non-profit status. Musk alleges that under CEO Sam Altman's leadership, the firm abandoned these principles in pursuit of billions in funding from Microsoft.
With the judge's green light, the case will now head to a jury trial scheduled for April 2026. This decision marks a pivotal moment in the high-stakes legal battle that has captivated the tech industry.
OpenAI Calls Lawsuit Baseless Harassment
In a strongly worded statement, OpenAI welcomed the trial but dismissed Musk's claims. The company labeled the lawsuit as baseless and part of a pattern of harassment by the billionaire technocrat.
"Mr. Musk’s lawsuit continues to be baseless and a part of his ongoing pattern of harassment, and we look forward to demonstrating this at trial," OpenAI stated. "We remain focused on empowering the OpenAI Foundation, which is already one of the best resourced nonprofits ever."
Elon Musk's lawyer, Marc Toberoff, and representatives from Microsoft did not immediately respond to queries about the court decision.
Court Ruling Details and Key Evidence
In her detailed ruling, Judge Rogers refused to dismiss Musk's core allegations. She noted that while evidence remains unclear, Musk claims his contributions to OpenAI had a specific charitable purpose. He attached two fundamental terms to his support: that OpenAI be open source and that it would remain a non-profit.
The judge also rejected OpenAI's argument that Musk lacks legal standing because he used an intermediary to donate $38 million in seed money. "Holding otherwise would significantly reduce the enforcement of a large swath of charitable trusts, contrary to the modern trend," she wrote.
Furthermore, Rogers refused to toss out Musk's fraud allegations. She pointed to compelling evidence from 2017, including emails and private notes from OpenAI co-founder Greg Brockman. In a September email, Brockman told Musk he would "like to continue with the non-profit structure." Just two months later, in a private note, he wrote: "cannot say that we are committed to the non-profit. don’t want to say that we’re committed. if three months later, we’re doing b-corp then it was a lie."
Background: The OpenAI Restructuring and Microsoft's Stake
The conflict stems from OpenAI's major restructuring. In October 2025, the company announced that Microsoft would hold a 27% stake in the now $500 billion-valued entity. OpenAI stated that its foundation would retain control of for-profit operations, but the transition has fueled bitter arguments between Musk and Altman, once business partners.
In 2025, OpenAI also rejected an unsolicited bid from Elon Musk to acquire the assets of the nonprofit controlling the company for $97.4 billion. Sam Altman has criticized Musk's lawsuit, calling it a weaponization of the legal system to slow down a competitor.
Elon Musk founded his own artificial intelligence startup, xAI, in 2023, adding another layer to this rivalry.
Key Takeaways from the Legal Battle
- The lawsuit highlights deep tensions in tech regarding profit motives versus social responsibility.
- Musk's claims focus squarely on OpenAI's original non-profit mission and the implications of its restructuring.
- The ruling to proceed emphasizes the legal complexities surrounding charitable trusts and non-profit obligations.
- This case could set important precedents for how AI companies balance innovation, funding, and ethical commitments.
The stage is now set for a dramatic courtroom showdown in 2026, with billions of dollars and the future of AI governance at stake.
