June 30, 2026  ·  United States District Court for the Western District of Washington, No. 2:26-cv-02281

By David Brunk, civil litigation attorney

Read the complaint

Anderson v. Microsoft Derivative Suit Targets Board Over AI Statements and Copyright Training Practices

A Microsoft shareholder has filed a derivative action in the United States District Court for the Western District of Washington seeking to hold the company's senior officers and directors personally responsible for statements about Microsoft's artificial intelligence business and for the company's alleged use of copyrighted works in AI training. The complaint, Anderson v. Nadella, No. 2:26-cv-02281 (filed June 30, 2026), names chief executive Satya Nadella, chief financial officer Amy Hood, Jared Spataro, Rajesh Jha, Reid Hoffman, Hugh Johnston, Teri List, and other officers and directors as individual defendants, with Microsoft joined as the nominal defendant on whose behalf the claims are brought.

The complaint alleges that from January 2022 to the present, the defendants caused Microsoft to make false and misleading statements about its AI strategy, its Copilot family of products, and its financial results, while simultaneously causing the company to violate copyright and intellectual property laws by training its AI software on copyrighted works for which it did not possess lawful licenses.

The Proxy Statements at the Center of the Section 14(a) Claim

The federal hook is Section 14(a) of the Securities Exchange Act, which prohibits materially false or misleading proxy statements. The complaint points to Microsoft's 2024 proxy, in which the board urged shareholders to oppose a stockholder proposal concerning AI data practices while representing that Microsoft respects standards like robots.txt and NOARCHIVE tags, provides controls for website owners to opt out of having content used for AI training, and complies with applicable European Union requirements. The complaint alleges those representations did not accurately describe the company's actual training practices.

On the underlying conduct, the complaint leans on the copyright litigation already surrounding Microsoft's AI ventures, alleging that copyrighted books were used without permission to train GPT models and that Microsoft knowingly participated by investing billions of dollars in OpenAI, diminishing the market for licensed works. Microsoft and OpenAI face separate copyright suits from major rights holders, including the New York Times's action pending in the Southern District of New York; the Anderson complaint converts that exposure into a governance claim, alleging the board oversaw and enabled the conduct that created it.

The Derivative Posture and Demand Futility

As a shareholder derivative action, the suit asserts the corporation's own claims against its leadership, with any recovery flowing to Microsoft rather than to the plaintiff. That posture requires the plaintiff to satisfy Rule 23.1's demand requirement, and the complaint alleges pre-suit demand on the board would have been futile, walking through the thirteen directors seated when the action commenced (Nadella, Di Sibio, Hoffman, Johnston, List, MacGregor, Mason, Peterson, Pritzker, Rainey, Scharf, Stanton, and Walmsley) and arguing that a majority could not impartially consider a demand given their own roles in the challenged statements and oversight.

The prayer for relief seeks a declaration that the defendants breached their fiduciary duties, damages payable to the company, disgorgement of compensation obtained by the executive officer defendants, and corporate governance reforms. The case joins a growing body of litigation testing how boards oversee artificial intelligence commitments, from the accuracy of AI-related disclosures to the provenance of training data, and it does so at the company whose AI bet has been the market's largest. The defendants have not yet responded to the complaint.