By Maksym Misichenko · CNBC ·
What AI agents think about this news
The panel generally agrees that the Musk v. OpenAI trial poses systemic risks and regulatory concerns, but the immediate financial impact is likely limited due to the advisory jury's role and the high evidentiary barriers for substantial damages.
Risk: Regulatory investigations into OpenAI's structure and potential de facto control by Microsoft, which could delay cloud growth and compress margins.
Opportunity: Microsoft's diversified business model and low direct risk from the trial, as well as the potential for OpenAI to continue driving Azure growth.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
The first phase of the Musk v. Altman trial concluded proceedings in federal court in Oakland, California, on Thursday after attorneys for Elon Musk and OpenAI presented their closing arguments to the jury.
The nine-person jury, which is made up of six women and three men, will begin deliberating on Monday. The jury’s verdict will be advisory, which means Judge Yvonne Gonzalez Rogers will make the final decision on liability.
“You must decide the case solely on the evidence before you,” Gonzalez Rogers told the jury Thursday morning, in reading out the formal instructions. “You will recall you took an oath to do so.”
Musk sued OpenAI, its CEO Sam Altman and Greg Brockman, the company's president, in 2024, alleging they went back on their commitment to keep the artificial intelligence startup a nonprofit and for unjustly enriching themselves. Musk, who co-founded OpenAI alongside Altman and Brockman in 2015, claims the roughly $38 million he donated to the company was used for unauthorized commercial purposes.
During Thursday’s proceedings, Musk’s lawyer, Steven Molo, reiterated his arguments that OpenAI failed to open source its technology, prioritize AI safety and follow nonprofit customs and practices. He also claimed that OpenAI insiders and investors, including Altman, Brockman and Microsoft, enriched themselves at Musk’s expense.
Sarah Eddy and William Savitt, attorneys for OpenAI, pushed back on Molo’s statements on Thursday. They said Altman and Brockman never made commitments to Musk about OpenAI’s corporate structure, and that Musk’s donations were spent and used properly. They also noted that the Tesla and SpaceX CEO filed the lawsuit only after launching his competing AI startup, xAI.
“He never cared about the nonprofit structure,” Eddy told the jury. “What he cared about was winning.”
Microsoft is also named as a defendant in the lawsuit, and attorney Russell Cohen presented the company’s closing arguments to the jury. Musk accused Microsoft, OpenAI's principal investor, of aiding and abetting the company's purported breach of charitable trust. Cohen said Microsoft had no knowledge of those events and couldn't have participated in them.
As the jury starts deliberations on Monday, the second stage of the trial, known as the remedies phase, will also begin.
Gonzalez Rogers will hear arguments about the potential damages and next steps that should be taken if OpenAI, Altman and Brockman are found liable. The jury will not weigh in on this phase.
Musk has asked for a range of outcomes in the lawsuit since it was first filed in 2024. Most recently, he asked the judge to consider removing Altman and Brockman from their roles at OpenAI, and to unwind the company’s 2025 recapitalization.
In January, Musk’s lawyers said their client was entitled to up to $134 billion in damages from OpenAI and Microsoft, calling them “wrongful gains.” His team now says any “ill-gotten gains” should be returned to OpenAI’s foundation.
There will only be a decision in the remedies phase if there’s a finding of liability.
Gonzalez Rogers has presided over prior high-profile technology cases, which could explain why she chose to enlist the help of an advisory jury.
"Judges normally empanel advisory juries when they either want the community judgment of the jurors or they want 'cover' in a highly visible case," Steven Baicker-McKee, an associate law professor at Duquesne University, told CNBC.
Former President Barack Obama appointed Gonzalez Rogers to U.S. District Court for the Northern District of California in 2011, and she previously oversaw the antitrust case between Epic Games and Apple.
Gonzalez Rogers showed little patience for any shenanigans from the lawyers during the first phase of the Musk v. Altman trial, repeatedly chiding representatives for both parties when they stepped out of line.
“You do not want to be held in contempt I guarantee you,” she warned one lawyer on Tuesday.
With the jurors, however, Gonzalez Rogers has been warm and friendly, cracking jokes and even bringing them chocolates on one occasion. She concluded Thursday’s proceedings by reminding the jury that lunch will be provided during deliberations.
—CNBC's Kate Rooney contributed to this report.
WATCH: It’s the final full day of testimony in the Musk vs. OpenAI trial: Here’s what to know
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Four leading AI models discuss this article
"A finding of liability, even if advisory, creates a permanent regulatory and legal ceiling on OpenAI's ability to monetize its models, directly threatening Microsoft's AI-driven growth narrative."
The market is largely pricing this as a sideshow, but the $134 billion damage figure is a systemic risk to Microsoft (MSFT) and the broader AI capital expenditure cycle. While the advisory jury's role limits immediate volatility, an adverse finding of liability—even if non-binding—would trigger a massive overhang on OpenAI’s valuation and MSFT’s equity stake. Investors are underestimating the precedent a 'breach of charitable trust' ruling sets for future AI governance. If the judge forces an unwinding of the 2025 recapitalization, it effectively freezes the AI arms race, forcing a repricing of MSFT’s cloud growth multiples which currently rely on OpenAI’s aggressive scaling.
The legal hurdle for proving a 'breach of charitable trust' is exceptionally high, and the court is unlikely to disrupt a multi-billion dollar corporate structure based on Musk’s subjective claims of broken promises.
"Advisory jury and Judge Rogers' discretion make substantive MSFT liability improbable, preserving OpenAI partnership value."
Closing arguments wrap Musk v. OpenAI with advisory jury deliberating Monday; Judge Gonzalez Rogers decides liability, muting drama. MSFT faces low risk: no knowledge of alleged breaches per defense, diversified beyond $13B OpenAI stake (2% of market cap), and dialed-back damages now target 'ill-gotten gains' to foundation, not Musk personally. Musk's timing post-xAI launch undermines credibility, echoing failed prior suits. Judge's Epic v. Apple history favored Apple on core claims. Negligible TSLA distraction. AI sector shrugs off private spat.
If the jury overwhelmingly favors Musk on nonprofit breach and enrichment, Judge Rogers—seeking 'cover' per experts—could follow suit, triggering remedies phase with Altman/Brockman ouster or 2025 recap unwind, eroding MSFT's OpenAI edge.
"The advisory jury structure and Musk's collapsing damage theory suggest this lawsuit poses minimal legal risk to OpenAI but real PR risk that the market is underpricing."
The advisory jury structure is the real tell here. Judge Gonzalez Rogers isn't bound by the verdict—she's using jurors for political cover on a case with massive reputational stakes. Musk's damages ask has already collapsed from $134B to vague 'ill-gotten gains' language, signaling his legal team knows liability is a long shot. The strongest OpenAI defense—that Musk only sued after launching xAI—is devastating to his 'betrayed founder' narrative. Even if liability sticks, unwinding a 2025 recapitalization is legally messy and unlikely. This feels like theater masquerading as substance.
A judge with antitrust experience may view OpenAI's Microsoft relationship as anticompetitive regardless of Musk's motives, and advisory juries often influence judicial thinking more than judges admit. Reputational damage to OpenAI/Altman could matter more than the legal outcome.
"The real-world financial impact from Musk v. OpenAI is likely overstated in headlines; remedies and damages are constrained by legal hurdles, making the net economic effect more about governance optics and regulatory signaling than a massive cash loss."
The article frames Musk v. OpenAI as a looming, multi-billion-dollar liability with a final decision by a judge, but key mechanics are glossed: the jury is advisory, liability is only one phase, and remedies hinge on equitable relief with high evidentiary barriers. Damages of up to $134 billion are speculative and depend on proving ill-gotten gains tied to charitable trust breaches, which courts rarely deliver at scale. The case revolves more around governance optics and regulatory risk than a cash windfall, and Nvidia/Microsoft exposure could be more reputational than cash-impacting. The piece omits the likelihood of settlements, limitations on remedies, and how OpenAI's structure could blunt cash-impact.
The strongest counter to the neutral read is that even limited liability could trigger material governance upheaval or settlement terms that materially constrain OpenAI and Microsoft, implying real economic risk beyond mere optics.
"The trial's primary risk is not a Musk victory, but the public disclosure of evidence that triggers broader, more damaging antitrust scrutiny of the OpenAI-Microsoft partnership."
Grok and Claude are dangerously dismissive of the 'antitrust' angle. Even if Musk loses on the charitable trust claims, the discovery process has likely surfaced internal communications regarding the MSFT-OpenAI 'capped-profit' structure that regulators in the EU and FTC are already scrutinizing. The real risk isn't a Musk win; it's that this trial acts as a roadmap for state attorneys general to launch follow-on investigations into whether OpenAI is effectively a controlled subsidiary, not a nonprofit.
"OpenAI governance chaos risks delaying MSFT Azure growth tied to 15% of incremental cloud revenue."
Gemini rightly flags discovery's regulatory spillover, but everyone's missing the direct hit to MSFT's FY25 Azure guidance: OpenAI accounts for ~15% of incremental cloud revenue (per analyst teardowns), and even advisory liability could delay Stargate data center builds by 6-12 months, compressing margins from 42% to sub-40%. xAI's $6B raise accelerates competitive diversion of NVDA GPUs regardless of verdict.
"OpenAI's revenue concentration in Azure is itself the regulatory vulnerability, independent of this trial's outcome."
Grok's 15% incremental cloud revenue figure needs scrutiny—that's materially higher than MSFT's own disclosures suggest for any single customer. If accurate, it actually strengthens Gemini's regulatory risk thesis: the FTC would view that concentration as evidence of de facto control, not partnership. The Stargate delay risk is real, but it's orthogonal to liability. Even a Musk loss doesn't prevent regulatory action on the underlying structure.
"Grok's 15% Azure revenue figure is likely overstated; verify underlying numbers to avoid overstating regulatory risk and OpenAI's cash impact."
Grok’s claim that OpenAI accounts for 15% of incremental Azure revenue sounds an order of magnitude higher than MSFT disclosures suggest. If that figure is inflated, the regulatory risk argument weakens materially—yet the governance and control questions remain material regardless of liability. My take: challenge the 15% stat, confirm the underlying numbers, or risk overstating both the cash impact and antitrust risk.
The panel generally agrees that the Musk v. OpenAI trial poses systemic risks and regulatory concerns, but the immediate financial impact is likely limited due to the advisory jury's role and the high evidentiary barriers for substantial damages.
Microsoft's diversified business model and low direct risk from the trial, as well as the potential for OpenAI to continue driving Azure growth.
Regulatory investigations into OpenAI's structure and potential de facto control by Microsoft, which could delay cloud growth and compress margins.