In a significant legal development, a federal judge has indicated that a jury will have the opportunity to decide if OpenAI, a frontrunner in artificial intelligence, misled its co-founder Elon Musk during its transition from a nonprofit research entity to a for-profit corporation valued at $500 billion.

Without delivering an official verdict, U.S. District Judge Yvonne Gonzalez Rogers expressed her intention to deny OpenAI’s request to dismiss a lawsuit filed 17 months ago by Musk, who played a crucial role in establishing the San Francisco-based startup in 2015.

Judge Gonzalez Rogers was unambiguous in her declaration during a heated 90-minute session in Oakland, California, stating, “This case is going to trial.” Her remarks underscored the seriousness of the legal proceedings ahead.

While the judge still needs to sort out certain logistical aspects of the upcoming trial, she is also weighing the possibility of dismissing Musk’s claims of unjust enrichment against Microsoft. The tech giant has accrued a significant $135 billion stake in OpenAI after initially investing $1 billion in a for-profit subsidiary that the company launched in 2019.

According to the judge, there is enough evidence to warrant a jury trial involving Musk, the world’s wealthiest individual with an estimated net worth of $713 billion, and OpenAI CEO Sam Altman, who has amassed a fortune of approximately $2 billion. Should the trial move forward, both billionaires would likely be required to testify under oath, setting the stage for a high-stakes courtroom confrontation.

“Part of this is about whether a jury believes the people who will testify and whether they are credible,” Gonzalez Rogers said.

It’s unclear when the judge will schedule the trial.

The case revolves around OpenAI’s origins as a nonprofit research lab that Musk and Altman launched to develop artificial intelligence designed primarily for the good of humanity. That mission, the two founders believed, could serve as a foil to AI being developed by Google and other profit-driven companies that, they claimed, could deploy the technology recklessly as they strived to make more money.

Musk contributed $40 million, mostly funneled through donor-advised funds that he had set up, in addition to four Tesla vehicles. Then he and Altman had a falling out over OpenAI’s future, according to evidence that has surfaced so far.

At that point, Musk began to suspect that Altman and another OpenAI executive, Greg Brockman, might be plotting to transform the research lab into a profit-seeking company, according to evidence submitted to the the judge.

Although Altman sought to reassure Musk he remained committed to OpenAI’s non-profit mission, Musk decided to cut ties with the startup and eventually launched a rival, xAI, that was valued at $230 billion in a just-completed fundraising.

A 2017 diary entry by OpenAI’s Brockman was among the information that Gonzalez Rogers cited to support her rationale for allowing Musk’s lawsuit to go to trial.

In the diary, Brockman mused about his desire to become a billionaire and wrote, “We’ve been thinking that maybe we should just flip to a for profit. Making the money for us sounds great and all,” according to court filings.

At one point, OpenAI’s own board of directors had serious enough misgivings about Altman’s motives to trigger his firing in 2023 before quickly bringing him back as CEO in a comeback that Microsoft helped orchestrate.

One of the key issues that must be decided before Musk can pursue his fraud claims against OpenAI at trial is pinpointing when the alleged deceit occurred. That’s because there’s a three-year statute of limitations on his fraud claims.

Gonzalez Rogers indicated she will probably let a jury first decide when the alleged fraud against Musk occurred. The trial then would be allowed to proceed to the fraud phase if it’s determined that the suspected deceit began less than three years before Musk’s August 2024 filing of his lawsuit.