Judge dismisses Elon Musk’s fraud claims against OpenAI and Sam Altman before trial

Sam Altman and OpenAI got a major pre-trial win on Friday after a federal judge cut Elon Musk’s fraud claims from his lawsuit over the company’s structure and mission.

U.S. District Judge Yvonne Gonzalez Rogers made the ruling in Oakland, California, just before the fight went to a jury. The trial of course still goes ahead, but now it centers on breach of charitable trust and unjust enrichment, not fraud.

Jury selection starts Monday, and opening statements are expected Tuesday. Now Elon’s lawsuit says OpenAI, Sam, Greg Brockman, and Microsoft (MSFT) misled him and the public after OpenAI created a profit-making arm in 2019, after Elon had already left the board.

He says the company walked away from the nonprofit promise behind its 2015 launch. Elon had asked to drop the fraud and constructive fraud claims before trial because he said it would “streamline the case.”

He also said jurors should focus on whether OpenAI still serves humanity or has turned into a “wealth machine.” A Reuters calculation puts Elon’s damages demand at $150 billion, with the money meant to go to OpenAI’s charitable arm.

Judge cuts fraud claims as Elon keeps two core claims against OpenAI and Sam

The lawsuit began much wider than the case now heading into court. Elon filed 26 claims in November 2024 against OpenAI, Sam, and Greg. Before Friday’s ruling, only four claims were still alive.

Those were fraud, constructive fraud, unjust enrichment, and breach of charitable trust. Now the two fraud-based claims are gone, leaving the jury with the charitable trust and enrichment arguments.

Elon says OpenAI was supposed to stay a nonprofit forever. His complaint says the people behind it promised to build artificial intelligence for public benefit, not private gain. OpenAI later changed its structure so it could run a for-profit subsidiary.

That business is now valued at more than $850 billion, which is exactly why this courtroom fight is not some small tech grudge. There is real money, real control, and real market power sitting under every legal filing.

The personal history makes it sharper. Elon Musk and Sam Altman helped start OpenAI in 2015 with other tech figures who worried about the power of artificial intelligence. Back then, they were on the same side. Now they are rivals.

Elon started xAI in 2023 to compete with OpenAI. He also recently combined xAI with SpaceX in a deal that valued the merged business at $1.25 trillion.

The trial starts in federal court in Oakland, across the Bay Bridge from San Francisco, where OpenAI is based.

If Elon wins, he says he does not want the money for himself. He wants the court to send all “ill-gotten gains” back to OpenAI’s nonprofit side. He also wants Sam and Greg removed from their roles. On top of that, he wants the court to undo OpenAI’s profit-focused restructuring.

OpenAI and Elon fight in court while both sides chase bigger market plans

The timing is not quiet. Elon is preparing SpaceX for a public listing that could become a record IPO. OpenAI is also looking at a possible market debut in the fourth quarter. In investor papers sent out earlier this year, OpenAI named Elon’s lawsuit as a “risk to business.”

OpenAI has called Elon’s lawsuit “baseless.” In an X post earlier in April, the company called it a “harassment campaign that’s driven by ego, jealousy and a desire to slow down a competitor.” Elon has fired back in the same public arena.

In August, he wrote on X, “Scam Altman lies as easily as he breathes.” Sam answered in February with his own post: “Really excited to get Elon under oath in a few months, Christmas in April!”

X, formerly Twitter, and xAI also actually sued OpenAI and Apple in 2025 over alleged anticompetitive conduct.

A hearing in that case is set for May in Texas. In February, a federal judge in California also dismissed a separate xAI case that accused OpenAI of stealing trade secrets.

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