Musk Drops Fraud Claims Against OpenAI, Altman Ahead of Trial - Bloomberg.com

```json { "title": "Musk Drops Fraud Claims Against OpenAI Before Trial", "metaDescription": "Elon Musk dropped fraud claims against OpenAI and Sam Altman days before trial, narrowing his lawsuit to two claims as jury selection begins April 27.", "content": "<h2>Musk Drops Fraud Claims Against OpenAI and Altman on Eve of Trial</h2><p>Elon Musk dropped his fraud and constructive fraud claims against OpenAI, CEO Sam Altman, and co-founder Greg Brockman on April 25, 2026 — just days before jury selection was set to begin in a federal courthouse in Oakland, California. The move, approved by US District Judge Yvonne Gonzalez Rogers, narrows the long-running case <em>Musk v. Altman</em> (case no. 4:24-cv-04722) to just two surviving claims: unjust enrichment and breach of charitable trust. What began in November 2024 as a 26-claim complaint has been whittled down dramatically, and the trial is now poised to open on April 27, 2026.</p><h2>From 26 Claims to 2: How the Lawsuit Narrowed</h2><p>When Musk filed his November 2024 complaint against OpenAI, Altman, and Brockman, it contained 26 separate claims. By the time the trial approached, only four had remained: unjust enrichment, fraud, constructive fraud, and breach of charitable trust. On the eve of trial, Musk's legal team sought to drop two of those four — fraud and constructive fraud — a request Judge Gonzalez Rogers agreed to grant, describing it as a move to "streamline" the case.</p><p>The two claims that will now proceed to trial — unjust enrichment and breach of charitable trust — reflect the core of Musk's argument: that OpenAI departed from its founding nonprofit mission when it restructured into a for-profit entity and accepted billions in outside investment, including from Microsoft.</p><p>The trial itself will be divided into two phases. In the first, a jury will hear arguments on the remaining claims. In the second, the court will examine the remedies Musk is requesting — which are substantial. Musk is seeking up to $134 billion in damages, with a damages expert calculating up to $109 billion from OpenAI and up to $25 billion from Microsoft. Notably, Musk has stated he wants any damages directed to OpenAI's charitable arm rather than to himself personally.</p><p>Beyond damages, Musk is also seeking a court order to restore OpenAI's nonprofit status. In court filings, his lawyers stated: <em>"Plaintiff will seek an order removing Altman as a director from the OpenAI nonprofit board and removing both Altman and Brockman as officers of the OpenAI for-profit."</em></p><h2>OpenAI Calls the Move 'Evasive' as Trial Looms</h2><p>OpenAI's legal team did not receive the last-minute claim adjustments quietly. In a court filing, OpenAI's lawyers wrote: <em>"Trial begins in five days but Plaintiff still refuses to state plainly what claims he will pursue and what remedies he will seek."</em> The company characterized the move as evasive tactics on the part of Musk's legal team, framing the late-stage maneuvering as emblematic of broader litigation strategy rather than a genuine streamlining.</p><p>OpenAI's posture going into trial is notably adversarial. OpenAI strategy chief Jason Kwon sent a letter to the California and Delaware attorneys general in early April 2026 urging them to investigate what he described as "improper and anti-competitive behavior" by Musk and his associates ahead of the trial.</p><p>Sam Altman, for his part, had already signaled his eagerness for the courtroom confrontation. In February 2026, following Musk's unsolicited $97.4 billion bid to acquire OpenAI's nonprofit assets — which OpenAI rejected — Altman posted on X: <em>"Really excited to get Elon under oath in a few months, Christmas in April!"</em></p><h2>The Disputed Donations and a Decade of Conflict</h2><p>The legal dispute between Musk and OpenAI traces its origins back years before any lawsuit was filed. Musk co-founded OpenAI alongside Altman and others in December 2015, when it was incorporated as a Delaware nonprofit and later received 501(c)(3) tax-exempt status from the IRS on November 3, 2016. The organization was founded with an explicit mission to develop artificial intelligence for the broad benefit of humanity.</p><p>Musk departed OpenAI's board in 2018 following internal disagreements, including a failed effort to merge OpenAI with Tesla. After his departure, OpenAI established a for-profit subsidiary in 2019 under a "capped-profit" structure designed to limit investor returns to 100 times their investment, with any excess flowing back to the nonprofit. The OpenAI Foundation holds equity in the for-profit arm valued at $130 billion at the time the restructuring agreement was announced.</p><p>One contested element of the case involves Musk's financial contributions to OpenAI. In recent court filings, those donations were revised down to $38 million — the figure that currently stands — after Musk had previously claimed contributions of around $100 million and later $50 million. The discrepancy is likely to feature prominently in the trial's examination of what Musk is owed, if anything, by the organization he helped found.</p><p>Since leaving OpenAI, Musk co-founded xAI in 2023, a direct competitor in the AI industry. He recently merged xAI with X, formerly Twitter, in a deal valuing the combined entity at $1.25 trillion. OpenAI has pointed to xAI's existence as evidence that Musk's litigation is motivated by competitive interests rather than genuine concern for OpenAI's charitable mission.</p><h2>OpenAI's For-Profit Restructuring and $850 Billion Valuation</h2><p>Central to the trial's breach of charitable trust claim is OpenAI's transformation from a nonprofit into a commercially dominant technology company. OpenAI is now valued at over $850 billion following its for-profit restructuring, which converted the organization into a public benefit corporation while retaining the nonprofit OpenAI Foundation as a stakeholder holding equity in the for-profit business.</p><p>Musk's February 2026 bid to acquire the nonprofit's assets for $97.4 billion — which OpenAI rejected — came after the company had already announced its restructuring plans. Months after rejecting that bid, OpenAI completed its conversion. Musk's lawsuit argues that this transformation represents a fundamental betrayal of the organization's founding charitable purpose, and that Altman and Brockman enriched themselves and outside investors at the expense of the nonprofit mission OpenAI was built around.</p><p>Whether that argument will persuade a jury — or whether the court will accept Musk's requested remedies even if it does — remains to be seen. The two-phase trial structure means that even a jury finding in Musk's favor on unjust enrichment or breach of charitable trust would be followed by a separate judicial examination of what relief, if any, is appropriate.</p><h2>A Pattern of Parallel Litigation</h2><p>The Oakland trial is not the only legal front in the conflict between Musk's companies and OpenAI. X and xAI filed a separate lawsuit against OpenAI and Apple in 2025, alleging anticompetitive behavior; a hearing in that case is scheduled for May in Texas. A prior xAI lawsuit accusing OpenAI of stealing trade secrets was dismissed by a federal judge in California in February 2026.</p><p>The accumulated legal activity has framed the broader Musk-Altman conflict as one of the most consequential corporate disputes in the technology industry — pitting a founding donor against the organization he helped create, now worth nearly a trillion dollars and operating at the center of the global AI race.</p><h2>What Happens Next</h2><p>Jury selection in <em>Musk v. Altman</em> was scheduled to begin on April 27, 2026, in Oakland, California. The trial will proceed in two phases: the jury phase on the unjust enrichment and breach of charitable trust claims, followed by a court-led phase examining remedies. Musk's legal team has stated he will seek the removal of both Altman and Brockman from their leadership roles at OpenAI, in addition to the restoration of the organization's nonprofit status and damages of up to $134 billion directed to OpenAI's charitable arm.</p><p>The outcome will have significant implications not only for the two parties involved, but potentially for how courts interpret the obligations of nonprofit-founded technology organizations that transition to for-profit structures — a question with broad relevance across the AI industry.</p><p>For more tech news, visit our <a href=\"/news\">news section</a>.</p><h2>Why This Matters Beyond the Courtroom</h2><p>The <em>Musk v. Altman</em> trial arrives at a moment when the governance of AI companies — who controls them, what obligations they carry, and how founding missions translate into legal accountability — has never been more consequential. The decisions made inside organizations like OpenAI ripple outward into the tools and systems that increasingly shape how people work, make decisions, and manage their time and cognitive resources. Staying informed about the forces shaping the AI landscape isn't just a matter of business interest — it's a matter of personal and professional preparedness. Join the <a href=\"/#waitlist\">Moccet waitlist</a> to stay ahead of the curve.</p>", "excerpt": "Elon Musk dropped his fraud and constructive fraud claims against OpenAI, Sam Altman, and Greg Brockman on April 25, 2026, just days before trial. The move narrows the lawsuit to two remaining claims — unjust enrichment and breach of charitable trust — as jury selection in Oakland was set to begin April 27. Musk is seeking up to $134 billion in damages and court orders to remove Altman and Brockman from their OpenAI roles.", "keywords": ["Musk v Altman trial", "OpenAI lawsuit 2026", "Elon Musk OpenAI fraud claims", "Sam Altman trial", "OpenAI nonprofit restructuring"], "slug": "musk-drops-fraud-claims-openai-altman-trial-2026" } ```