A federal judge in Oakland, California, on 15 January rejected requests from OpenAI and Microsoft to dismiss Elon Musk's lawsuit against the ChatGPT maker for its conversion from a non-profit to a for-profit entity, as per a Bloomberg report.
The world's richest man claims that Sam Altman-led OpenAI has betrayed its founding mission as a public charity for billions in funding from Microsoft, it added.
With the judge's green light, the case will now head for jury trial in April 2026.
Notably, Musk was among the co-founders of OpenAI (started in 2015) and founded his own artificial intelligence startup, xAI, in 2023.
‘Baseless, pattern of harassment’: OpenAI reacts
In a statement, OpenAI said it welcomes the trial and called the billionaire technocrat's lawsuit baseless and a form of harassment.
“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. We remain focused on empowering the OpenAI Foundation, which is already one of the best resourced nonprofits ever.”
The report added that Musk’s lawyer, Marc Toberoff, and representatives of Microsoft didn’t immediately respond to queries on the court decision.
Musk vs OpenAI lawsuit: What did the court say?
In her ruling, US District Judge Yvonne Gonzalez Rogers refused to dismiss Musk’s lawsuit, which alleges that OpenAI broke its promise to operate as a charitable trust.
She wrote that while the evidence is unclear, Musk claims that his contributions to OpenAI “had a specific charitable purpose and that he attached two fundamental terms to it: that OpenAI be open source and that it would remain a nonprofit — purposes consistent with OpenAI’s charter and mission.”
Rogers also rejected an argument by OpenAI that Musk’s use of an intermediary to donate $38 million in seed money to the startup doesn’t strip him of legal standing to try to enforce those conditions.
“Holding otherwise would significantly reduce the enforcement of a large swath of charitable trusts, contrary to the modern trend,” she wrote.
The judge also refused to toss out Musk’s fraud allegations, pointing to emails and private notes of OpenAI co-founder Greg Brockman in 2017.
In an email that September, Brockman told Musk he would “like to continue with the non-profit structure” of OpenAI. According to the ruling, 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.”
OpenAI ownership: How much does Microsoft hold?
With a valuation of $500 billion, OpenAI in October 2025 said it was restructuring. Microsoft holds 27%, but its parent foundation will keep control of its for-profit operations.
The transition has fueled bitter arguments between Musk and Altman since 2024. The two were once business partners. In 2025, OpenAI also rejected an unsolicited bid from Musk to acquire the assets of the nonprofit that controls the company for $97.4 billion.
Altman has criticised Musk’s lawsuit challenging the OpenAI restructuring as a weaponisation of the legal system to slow down a competitor.
(With inputs from Bloomberg)
Key Takeaways
- A federal judge on 15 January rejected requests from OpenAI and Microsoft to dismiss Elon Musk's lawsuit.
- Elon Musk claims the ChatGPT maker betrayed its charitable mission by becoming a for-profit entity.
- With US District Judge Yvonne Gonzalez Rogers' green light, the case will now head for jury trial in April 2026.
