Judge Dismisses Fraud Claims in Musk-OpenAI Suit

A federal judge in Oakland, California, dismissed fraud claims from Elon Musk's lawsuit against OpenAI on Friday, narrowing the high-stakes dispute as jury selection begins Monday in a trial that could influence the artificial intelligence industry's governance.

U.S. District Judge Yvonne Gonzalez Rogers ruled that the fraud and constructive fraud allegations lacked sufficient grounds, a decision made at Musk's request to streamline the case ahead of trial. The remaining claims—breach of charitable trust and unjust enrichment—will proceed, focusing on whether OpenAI violated its founding principles by shifting toward profit-driven operations. Opening statements are set for Tuesday in the U.S. District Court for the Northern District of California, with the liability phase expected to last through mid-May.

Musk, who co-founded OpenAI in 2015 as a nonprofit research lab dedicated to developing AI for humanity's benefit, alleges the company misled him and the public. He contributed approximately $38 million before leaving the board in 2018 amid disagreements over its direction, including a failed proposal to merge it with Tesla. Shortly after his departure, OpenAI established a...