03-25-2025 
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The legal battle between Elon Musk and OpenAI is heating up, with a California federal court set to determine whether OpenAI breached a charitable trust. The latest court filings provide a roadmap for how both sides plan to proceed after a judge ruled that one of Musk’s 26 claims—Breach of Charitable Trust—deserves an expedited trial with a start date of December 8, 2025.
The core question: Did OpenAI violate a charitable trust?
At the heart of this lawsuit is the question: Did OpenAI breach a charitable trust, or did one even exist in the first place? Under U.S. law, a charitable trust is a legal obligation that ensures resources given for a charitable purpose remain dedicated to that mission rather than being used for private gain–and this is where Musk’s argument begins.
Musk argues that OpenAI was established as a nonprofit with a clear mission—to develop artificial general intelligence for the benefit of humanity and that this commitment led him and others to donate millions of dollars to the non-profit entity.
However, OpenAI later restructured, creating a for-profit arm, OpenAI Global LLC.
This transition allowed the company to grant Microsoft (NASDAQ: MSFT) a multi-billion dollar stake and exclusive rights to key portions of its technologies. Musk claims that this shift violated OpenAI’s nonprofit commitments and misused donor funds intended for public good, not private enterprise.
OpenAI, on the other hand, denies that a charitable trust was ever in place. They argue that starting as a nonprofit did not mean they were legally bound by charitable trust laws. Beyond that, they claim Musk’s donations did not include enforceable conditions preventing OpenAI from evolving into a for-profit business.
Now, it will be up to the court to determine who is right.
Why expedite the trust issue?
When Musk first sued OpenAI, its leadership, and Microsoft, he filed 26 claims. The judge dismissed four, stayed 21, and singled out one—Breach of Charitable Trust—as urgent enough to require an expedited trial.
Charitable trusts carry strict legal obligations, and if the court finds that OpenAI accepted money or resources under the premise of remaining a nonprofit for the public good, then legally, it cannot transition into a for-profit model without court approval. If this were to happen, the implications of the ruling could be significant and could jeopardize OpenAI’s current business structure and future plans.
Without the expedited trial, this lawsuit could have dragged on for years, with an estimated start date between 2027 and 2028. However, by accelerating this one claim in particular, the court will see that one of the most crucial issues in the case will be decided much sooner, which could have a domino effect on the remaining 22 claims depending on the outcome.
Elon Musk has nothing to lose
Musk and OpenAI CEO Sam Altman have been publicly feuding over this issue for nearly a year now, with each new court filing revealing more about their dispute. With that being said, one of Altman’s earlier claims about Musk now seems particularly relevant: “[Elon is] probably just trying to slow us down. He obviously is a competitor.”
Looking at the case objectively, Musk—who is currently the world’s richest man, with a net worth of around $433.9 billion—has little to lose. If he wins, OpenAI may be forced to revert to a nonprofit model, unwinding its partnership with Microsoft. Musk could even be awarded financial damages, possibly exceeding the amount he originally donated. If this were the outcome, it would not only be a personal victory but would also strategically benefit his AI startup, xAI, by weakening one of its strongest competitors, OpenAI.If Musk loses, OpenAI will continue operating as it has been, strengthening its for-profit model. His other claims against OpenAI, currently on hold, would also become more challenging to pursue. But even in that scenario, Musk would only have “lost” a fraction of his time and money—which are arguably small losses for the richest man in the world.
For OpenAI, however, the risks are much more significant. A ruling against them could upend their entire business model, forcing them to unwind agreements and potentially lose billions of dollars in valuation. It could even mandate that OpenAI sever ties with Microsoft, a key stakeholder in their company.
What comes next?
Although some of Musk’s claims have been stayed, and others have been outright dismissed, this legal battle is now on a fast track. As new developments emerge, we’ll continue to follow and report on the Musk vs. OpenAI saga. Stay tuned for updates as the courtroom drama unfolds, and in the meantime, catch up on the previous developments that took place in the Elon Musk vs OpenAI battle to get up to speed on the feud between these two tech giants.
Related reads:
- The Elon Musk vs Sam Altman Feud part 1
- The Elon Musk vs Sam Altman Feud part 2
- The Elon Musk vs Sam Altman Feud part 3
- The Elon Musk vs Sam Altman Feud part 4
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