Northwestern legal expert on jury ruling in OpenAI’s favor in Musk v. Altman court battle

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Northwestern legal expert on jury ruling in OpenAI's favor in Musk v. Altman court battle

"In no other country would we see two of the biggest corporate heads having to testify at a trial, having to explain their behavior. It shows that they are not above the law," expert says

CHICAGO - In less than two hours, a nine-person jury ruled in favor of OpenAI CEO Sam Altman in a trial in which cofounder Elon Musk accused Altman of "stealing a charity."

Musk cofounded OpenAI in 2015 with Altman and Greg Brockman, current president of OpenAI. Musk accused the pair of breaking a founding agreement when the company - established as a non-profit - restructured as a public benefit corporation in 2025. Musk claimed he was swindled into becoming a financial backer, and accused Altman and Brockman of enacting the restructuring for their own financial gain. Altman and OpenAI claim Musk wanted control, and to eventually fold OpenAI into X (formerly Twitter). The court ruled that Musk waited too long to bring the lawsuit and dismissed the case.

The case, which took place in Oakland, California, is a first of its kind, providing a look inside the inception of OpenAI, exposing private text messages, emails and diary entries between both parties and other tech moguls.

Monica Llorente, Distinguished Senior Lecturer, business association and corporate structure expert at Northwestern Pritzker School of Law, says this case shows that even tech billionaires are not above the law. Professor Llorente is available to media to speak on the subject.

On what a public benefit corporation is:

"There's for profit, not-for-profit and then a structure called 'public benefit.' It's essentially a mix of both a non-profit and for-profit structure. Public benefit corporations are for-profit entities, but are legally required to balance its financial profits with a commitment to generating a positive impact on society. These public benefit corporations have less transparency, less accountability - even less accountability than a for-profit corporation. This entity is fairly new, established in 2013 in Delaware, with no case law yet."

On the race to develop AI by tech companies and its cost:

"Everyone is struggling to be the first, the best in developing AI. Not only develop it, but many are looking to profit the biggest from it. That's what we are seeing with Musk and Altman. They want to have as much freedom as possible using public benefit corporations as the ideal vehicle and cover. The public is focused on them as characters, but are letting these corporations off the hook to run with billions of dollars in investment with limited transparency and accountability.

"AI isn't free. There are great costs to the economy, to electricity, to water, to the data centers being built under non-disclosure agreements that nobody knows about, to people's mental well-being when using AI. There is a need for guardrails and better regulations to hold these corporations accountable for the millions and billions that are being invested and the impact that they are already having on our world."

On Musk unknowingly bringing transparency to corporate structures:

"The fact that this went to trial is amazing, and it's forced the tech executives to testify on these issues and be upfront about how they created their structures and explain their reasoning.

"With this trial, Musk may have achieved bringing more transparency and accountability to these corporations without meaning to. We still don't know a lot about how these AI corporations are running their businesses. This trial has exposed some of that to the public, which is a good thing. This trial has restored my faith in the legal system, especially in these times. In no other country would we see two of the biggest corporate heads having to testify at a trial, having to explain their behavior. It shows that they are not above the law."

On the future of startups:

"New startups are going to have to be very clear of their processes in the beginning. Counsel will need to advise on how to incorporate the agreement between its funders, solidify exit strategies for funders and establish how investors come into play. This trial showed how messy that can become when things aren't clearly established upfront. We saw communications - emails, text messages, diary entries - become a part of this trial. The way Musk left and the way Musk was able to leave was a problem. The rope will be pulled tighter with new corporations."