Blockbuster AI Trial Ends With Elon Musk Loss Against OpenAI

0:00Ryan Barber:I'm Laura Thurow, Managing Director with Baird Private Wealth Management. For so many of us, life is busy. Between balancing family, career, and community, finding the time and focus to keep your financial plans on track can be a challenge. At Baird, we understand. Our financial advisors will partner with you to create a plan that's uniquely yours. One that gives you peace of mind and confidence, so you can focus on what matters most. Discover the Baird difference at rwbaird.com slash wsj.

0:33Jennifer Hiller:Elon Musk loses his case in the high-profile Silicon Valley trial between him and OpenAI. Plus, a new$1.776 billion Trump administration fund will pay people who say they were hurt by the legal system. And it's getting pushback.

0:49Ryan Barber:The Justice Department is saying that there is precedent for this. But you have a number of legal experts out there saying that this is creating that apparatus to potentially reward a number of Trump's allies who've received some scrutiny from federal investigators or prosecutors in recent years.

1:07Jennifer Hiller:And why a deal between two of the largest U.S. electricity providers is likely to face scrutiny from regulators. It's Monday, May 18th. I'm Alex Osula for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. We begin tonight's show in Oakland, California, where a three-week trial that fixated the tech world has reached a verdict. The jury there has rejected Elon Musk's claims against OpenAI. He has alleged that OpenAI, quote, stole a charity when it converted into a for-profit company. The jury took less than two hours to return the verdict, and they dismissed the case on a technicality.

1:46Jennifer Hiller:They found that Musk brought his lawsuit against OpenAI and its CEO Sam Altman after the statute of limitations expired. Musk's attorney said in court that his side will reserve its right to appeal. Deputy Tech Bureau Chief Bradley Olson told our Tech News Briefing podcast that the outcome wasn't a surprise.

2:03Ryan Barber:We did a story before the trial basically saying that Musk was an underdog in the case. And we even looked at prediction markets, which had kind of found that to be true too. And so, yes, this was the outcome that was expected. However, one of the most interesting things that came out, we've done some reporting at the journal about Sam Altman's personal investments and examples when there were overlap in deals that OpenAI did with outside companies and Sam having personal investments in those companies. And so there were a lot of details and specifics about those holdings that came out. It was also revealed that Greg Brockman, OpenAI's president, holds a stake in OpenAI that's worth about$30 billion.

2:46Ryan Barber:A lot of kind of disclosure and detail about their personal finances came out. And I think we will look back on it as something that litigated the foundational moments of the AI boom. And then I think it also brought us a new perspective and new information about some of these figures that are at the heart of this new technological revolution. So I think it'll be remembered for that, if nothing else.

3:11Jennifer Hiller:A decision against OpenAI could have created big problems for the company.

3:15Ryan Barber:The potential remedies would have unwound the conversion into a for-profit company. It could have ousted Sam Altman as CEO of OpenAI, and it could have required the for-profit company to fork over as much as like$180 billion to the nonprofit. And so it would have really drastically affected their ability to operate.

3:36Jennifer Hiller:So for now, the trial's conclusion removes a hurdle in OpenAI's path to an IPO. And we should note that News Corp, owner of The Wall Street Journal, has a content licensing partnership with OpenAI.

3:50Jennifer Hiller:And now on to one of the biggest deals of the year. It's Florida-based NextEra Energy, the owner of Florida Power & Light, which has agreed by Virginia utility Dominion Energy. The$67 billion tie-up would create an East Coast energy titan. Utilities are seeing a massive upswing in demand because of the build-out of AI data centers. and the industry plans to spend tens of billions of dollars to build new sources of power generation and transmission. For more on the deal, Jennifer Hiller, who covers the power industry for the journal, joins me now. Jennifer, tell us more about the companies involved in this deal.

4:25Ryan Barber:NextEra is the biggest utility in the country, and Dominion is one of the biggest. We're talking about a lot of customers, 10 million across four states. NextEra is a humongous developer of renewable energy resources. They have a lot of wind, solar, and battery across the country. They own a lot of transmission lines. Dominion, its main business is in Virginia and the Carolinas. They serve basically the world's biggest data center market in Data Center Alley in northern Virginia.

4:59Jennifer Hiller:Speaking of those data centers, they've become a political issue around rising electricity costs, with concerns that residents are footing the bill as data centers multiply. Electricity costs came up in New Jersey Governor Mikey Sherrill's inauguration speech earlier this year. I'm going to sign my first in a series of executive orders to declare a state of emergency on utility costs. Jennifer, how do you think these concerns about electricity costs are going to affect regulators' thinking on this deal?

5:28Ryan Barber:So they are going to have to get the approval of state utility regulators in Virginia, North Carolina, and South Carolina. They're going to want to see obvious customer savings here. The company will have to go in and argue that the combined Nextera and Dominion will be able to deliver customer benefits. One of the things that they are offering is a little more than$2 billion in customer credits. And so that is their effort to try to head off some of the concern about costs.

6:00Jennifer Hiller:That was WSJ reporter Jennifer Hiller. Thanks, Jennifer.

6:04Ryan Barber:Thank you.

6:05Jennifer Hiller:Markets closed mixed today, with the indexes making relatively small moves. The Dow closed up 0.3 percent, while the S &P was down 0.1 percent, and the Nasdaq fell half a percent. Coming up, the latest moves from the Trump administration, including a controversial new settlement fund. And will going back to grad school actually give you a leg up in your career? We look at what the data say after the break.

6:35Ryan Barber:What does leadership really look like? On The Power of Advice, a new podcast series from Capital Group, you'll hear from athletes, entrepreneurs and executives who've led on the field, in the boardroom and in their communities. It's not about titles. It's about impact. Discover what drives them and the advice they carry forward. Subscribe and start listening today. Published by Capital Client Group, Inc.

7:09Jennifer Hiller:Today, President Trump withdrew a lawsuit he had filed that sought billions of dollars from the IRS. He's also dropping two other claims against the government over the search of his Mar-a-Lago estate and about the investigation into Russian interference in the 2016 election. That comes alongside the announcement for an unusual settlement fund. The government's, quote, anti-weaponization fund will receive nearly$1.8 billion, specifically$1.776 billion. The money is for compensating people who claim they were victimized by the Justice Department. I'm joined now by our Ryan Barber, who covers the Justice Department.

7:43Jennifer Hiller:Ryan, what do we know about how this fund will work and who's eligible for a payout?

7:48Ryan Barber:Right now, there are just so many questions that are looming over this fund and the actual execution of it. What we do have so far is a memo that is a little bit over a page long that certainly talks about the size, that talks about a commission of people who will be deciding who is worthy of one of these payouts. But we don't know how transparent this will be and how readily any payouts will be released.

8:13Jennifer Hiller:What's unusual about the creation of this fund?

8:16Ryan Barber:To get into what's unusual about this fund, you really actually have to go back to the lawsuit that put us in motion. Trump filed a lawsuit against the IRS seeking more than $10 billion based upon when he was included in a leak of tax return information involving several of the wealthiest people in America. The lawsuit itself immediately raised ethics concerns because you have the head of a government in his own personal capacity suing the government he leads. The judge overseeing the case herself raised questions about whether there were in fact adverse parties necessary for the existence of the lawsuit in the first place.

8:56Ryan Barber:on the heels of a lot of that commotion, we have this settlement. Certainly what the Justice Department is saying is that there is precedent for this. They point to some funds that were created, albeit in much smaller size, as recently as under the Obama administration. But you have a number of legal experts out there saying that this is a one-of-a-kind scenario to potentially reward a number of Trump's allies who've received some scrutiny from federal investigators or prosecutors in recent years.

9:25Jennifer Hiller:It's also Democratic lawmakers who have condemned the program. Maryland Representative Jamie Raskin today called it fraudulent and dangerous.

9:32Ryan Barber:Donald Trump is setting up a$1.7 billion political slush fund for the Proud Boys and the Oath Keepers and his other political lieutenants and hangers-on. That's an absolute violation of congressional spending power. Congress never voted for$1.7 billion for him to give away to his friends.

9:51Jennifer Hiller:Is there any action that these lawmakers could take to counteract the fund?

9:55Ryan Barber:Add that to the list of questions. So what the 93 House Democrats, including Representative Raskin, did today in Trump's IRS suit is they joined the ranks of those who were filing amicus briefs. The brief filed by someone who's not a direct party in a lawsuit. And among the points they made was that any settlement is one that the Justice Department lacks authority to make.

10:18Jennifer Hiller:And why is the fund set at$1.776 billion?

10:23Ryan Barber:So$1.776 billion. If you take out billion, it's 1776. Trump has thrown himself into this year's 250th birthday for the United States. Trump is looking to the celebration itself as a possible moment for addressing what he sees as wrongs committed by the justice system. We understand that White House officials are considering a plan in which he would issue 250 pardons to mark the 250th anniversary. So we see this somewhat as an extension of this idea of mercy or compensating those who've been aggrieved by past prosecutions.

11:03Jennifer Hiller:That was WSJ reporter Ryan Barber. Thanks, Ryan.

11:06Ryan Barber:Thanks for having me.

11:07Jennifer Hiller:In other news out of the Justice Department, federal prosecutors are dropping their criminal fraud case against Indian billionaire Gautam Adani. It's the latest effort by the Trump administration to abandon cases brought by the prior administration as its enforcement priorities shift, as well as to resolve pending matters against Adani. The Treasury Department, meanwhile, said today that a unit of Adani's conglomerate, Adani Group, will pay$275 million to settle an investigation into alleged violations of Iran sanctions. Last week, the SEC reached an agreement with Adani and his nephew to settle related civil charges.

11:42Jennifer Hiller:The Adonis didn't admit wrongdoing. A spokesman for Adonis conglomerate today declined to comment. Separately, in Washington, President Trump will host a swearing-in ceremony for incoming Federal Reserve Chair Kevin Warsh at the White House on Friday. The ceremony is a reflection of Trump's personal interest in the appointment. Most recent ceremonies have been held at the Fed, and the last time a president attended was 2006.

12:09Jennifer Hiller:And finally, going back to grad school has long been plan B for young professionals. But these days, getting a master's degree isn't the job guarantee it used to be. A new analysis from labor market think tank Burning Glass Institute found that the unemployment rate for workers under 35 with a master's degree has rarely been higher in the past 20 years. However, the unemployment rate for those younger workers with a Ph.D., law, or medical degree has rarely been lower. One potential reason, according to Burning Glass's chief economist, while law and medical school degrees amount to a license to practice, master's degrees are more of a signal of a worker's value.

12:45Jennifer Hiller:And with more master's degrees than ever, that signal loses value when so many people have one. And that's what's news for this Monday afternoon. Today's show is produced by Pierre Bien-Aimé and Danny Lewis with supervising producer Tali Arbel. I'm Alex Osalev for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

13:15Ryan Barber:This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.