Oakland, California, April 25: Elon Musk, founder of Tesla and xAI, has withdrawn his fraud allegations against OpenAI and its co-founders Sam Altman and Greg Brockman just days before the scheduled trial, significantly narrowing the legal battle that has gripped the global artificial intelligence industry. The move reduces his original 26-count complaint — filed in November 2024 — to just two surviving claims: unjust enrichment and breach of charitable trust. Jury selection is set to begin on Monday in a federal court in Oakland, California.

What Claims Remain and Why They Matter

US District Judge Yvonne Gonzalez Rogers permitted Musk to streamline the case ahead of trial, allowing the two remaining claims to proceed. The dropped fraud charges were among the most aggressive in the original complaint, and their removal is being seen by legal observers as a tactical recalibration rather than a concession on the core dispute.

The surviving claims — unjust enrichment and breach of charitable trust — strike at the heart of Musk's argument: that OpenAI betrayed its founding promise as a non-profit dedicated to humanity's benefit when it pivoted toward a for-profit structure backed by Microsoft's multi-billion-dollar investment.

Musk is seeking damages of up to $134 billion, which he has stated should be redirected to OpenAI's charitable arm should he prevail in court.

The Two-Phase Trial Structure

The trial will unfold in two distinct phases. In the first phase, a jury will hear arguments on the remaining claims and deliver a non-binding advisory verdict — an unusual procedural arrangement that reflects the complexity of the case.

In the second phase, Judge Gonzalez Rogers will independently determine the remedies Musk is entitled to, including his demands to restore OpenAI's non-profit status and remove both Altman and Brockman from their leadership positions.

OpenAI and Microsoft Push Back Hard

OpenAI, alongside Sam Altman, Greg Brockman, and Microsoft, has categorically denied all allegations, calling them baseless. The defendants have also accused Musk of introducing last-minute demands on the eve of trial — a characterisation that underscores the adversarial nature of the proceedings.

OpenAI's legal team has argued that Musk's motivations are competitive rather than altruistic, pointing to his 2023 launch of rival AI firm xAI as evidence that he has a direct commercial interest in undermining OpenAI's growth and credibility.

Background: From Co-Founder to Courtroom Rival

Musk was among the original co-founders of OpenAI in 2015, when the organisation was established as a non-profit research lab with a mission to develop artificial general intelligence for the benefit of all humanity. He departed from its board in 2018, citing conflicts of interest with his work at Tesla on autonomous driving AI.

The relationship soured dramatically after OpenAI's partnership with Microsoft deepened and the company began transitioning toward a for-profit model. Musk has consistently argued — both publicly and in court filings — that this shift constitutes a betrayal of the organisation's founding charter and the trust placed in it by early donors and the public.

In early April 2025, Musk filed court documents specifically requesting the removal of Altman and Brockman, framing his lawsuit as an effort to reverse OpenAI's corporate restructuring and return it to its non-profit research roots.

Broader Implications for the AI Industry

This trial arrives at a pivotal moment for the global AI sector. OpenAI's potential conversion to a for-profit entity has drawn scrutiny not just from Musk, but from regulators, ethicists, and rival firms who question whether profit motives can coexist with responsible AI development.

The outcome of this case could set a legal precedent for how AI organisations — many of which began as non-profits or research institutions — are permitted to restructure as they attract massive commercial investment. A ruling in Musk's favour could trigger similar legal challenges against other AI firms undergoing corporate transitions.

With jury selection beginning Monday and the case now sharply focused on two core claims, the coming weeks will be closely watched by technology investors, AI researchers, and policymakers worldwide. The verdict — even the advisory one — could reshape the regulatory and legal landscape for artificial intelligence for years to come.