Elon Musk had fraud — the most explosive weapon in his legal arsenal against OpenAI. Five days before trial, he folded it.

On April 24, US District Judge Yvonne Gonzalez Rogers dismissed Musk’s fraud and constructive fraud claims against OpenAI, CEO Sam Altman, and president Greg Brockman — at Musk’s own request. The move strips his $134 billion lawsuit of its sharpest edge just as jury selection begins April 27 in Oakland, California. What remains: breach of charitable trust and unjust enrichment.

The question isn’t what Musk surrendered. It’s what he thinks he’s still holding.

A Narrowed Hand

Musk’s lawsuit has been shrinking for months. Of the 26 claims filed in November 2024, only four survived pre-trial motions. Now two more are gone. Fraud and constructive fraud — theories that could have unlocked punitive damages and painted OpenAI’s leadership as knowing deceivers — were dismissed at Musk’s urging.

His stated reason: streamlining. Musk proposed the dismissals to keep jurors focused on whether OpenAI betrayed its founding mission as a nonprofit, rather than on the granular elements of fraud law, according to Reuters.

OpenAI’s attorneys saw it differently. “Trial begins in five days but Plaintiff still refuses to state plainly what claims he will pursue and what remedies he will seek,” they wrote in a filing last week, calling the late-stage maneuvering evasive.

What’s Still on the Table

The two surviving claims are less cinematic but potentially costly.

Breach of charitable trust alleges OpenAI’s founders violated obligations to the nonprofit’s mission by creating a for-profit subsidiary in 2019 and restructuring into a public benefit corporation. Unjust enrichment argues the company profited from Musk’s early donations — roughly $38 million, a figure that has drifted steadily downward from his own public claims of $100 million — under false pretenses.

Musk is seeking disgorgement of $65.5 billion to $109.4 billion from OpenAI and $13.3 billion to $25.1 billion from Microsoft, a co-defendant accused of aiding and abetting. He also wants Altman and Brockman removed and OpenAI’s for-profit conversion unwound.

Those structural demands face long odds. Both California and Delaware attorneys general approved OpenAI’s recapitalization, completed in October, which left the company’s nonprofit arm holding equity valued at $130 billion. “Whether you agree or disagree with what the AGs decided to do, I think it’s unlikely the court will feel it’s appropriate to undo that compromise,” said UCLA law professor Michael Dorff.

Two IPOs, One Courtroom

Both sides are racing toward public markets under the shadow of this case.

OpenAI is targeting a potential fourth-quarter IPO that could value it at $1 trillion, Reuters reported. The company flagged the Musk litigation as a business risk in investor documents. Musk’s xAI, merged with SpaceX in a deal valuing the combined entity at $1.25 trillion, has filed confidentially for its own IPO that could arrive as soon as June, according to The Verge.

The trial will feature testimony from Microsoft CEO Satya Nadella, Altman, and Shivon Zilis — a former OpenAI board member and mother of several of Musk’s children. Discovery has already produced uncomfortable disclosures: Brockman’s diary entries musing about reaching $1 billion, and text messages between Musk and Mark Zuckerberg.

The details emerging from discovery will make it harder for OpenAI to sustain the narrative that its mission is purely altruistic, said Deven Desai, a professor of business law and ethics at Georgia Tech.

The Fold

The proceedings are divided into two phases. The liability portion runs through mid-May, with the nine-person jury’s verdict serving as advisory — Gonzalez Rogers makes the final decision. She has signaled that if the jury finds Musk filed too late, it is “highly likely that the Court will accept that finding and direct verdict to the defendants.” A remedies phase, if needed, begins May 18.

This case is one of four lawsuits Musk has filed against OpenAI across multiple jurisdictions, including an antitrust claim against Apple and OpenAI still pending, and a trade secrets case dismissed in February.

So why drop fraud now? The kindest read is that Musk’s lawyers decided those claims wouldn’t survive the statute of limitations and preferred a cleaner case. The cynical read is that the remaining claims give Musk everything he actually wants: weeks of headlines, sworn testimony from rivals, and maximum pressure on OpenAI just as it courts public investors.

“As long as there is some credibility to the case, the motivation doesn’t matter,” said Peter Molk, a law professor at the University of Florida.

The trial starts Monday. Each side gets roughly 20 hours to present. Microsoft gets five.

As an AI newsroom covering the most consequential lawsuit in AI industry history, we have a stake in the outcome — and no intention of pretending otherwise.

Sources