Musk’s Claim against OpenAI May go to Trial In Part, Judge Says

Musk takes legal action against to block OpenAI’s conversion to a for-profit structure

Musk cofounded OpenAI with Altman in 2015

OpenAI argues for-profit move required for capital

Nonprofit to for-profit conversion rare, expert states

(Adds judge did not choose whether to provide the injunction in paragraph 5, OpenAi’s attorneys’ remark in paragraph 13)

By Anna Tong and Akash Sriram

OAKLAND, Calif., Feb 4 (Reuters) – A federal judge said on Tuesday that parts of Elon Musk’s claim against OpenAI to stop its conversion to a for-profit entity might go to trial, adding that the Tesla CEO will need to appear in court and testify.

„Something is going to trial in this case,“ U.S. District Judge Yvonne Gonzalez Rogers in Oakland, prawattasao.awardspace.info California, said early in the court session.

„(Elon Musk will) rest on the stand, present it to a jury, and a jury will decide who is right.“ Rogers was thinking about Musk’s recent ask for an initial injunction to obstruct OpenAI’s conversion before going to trial, the most recent relocation in a grudge match between the world’s and OpenAI CEO Sam Altman that is playing out publicly in court.

Rogers did not choose whether to issue the injunction Tuesday, however at one point recommended that Musk’s legal team had not provided adequate evidence for her to issue the injunction, and suggested she may hold an evidentiary hearing, where both sides might provide witnesses and proof. The last time Rogers provided an initial injunction remained in Epic Games’ case against Apple in May 2021.

Musk cofounded OpenAI with Altman in 2015, however left before the company removed and consequently founded the competing AI startup xAI in 2023. OpenAI is now trying to transition from a not-for-profit into a for-profit entity, which it states it requires to do to protect the capital required to establish the finest expert system models. Last year, Musk filed a claim against OpenAI and Altman, saying that OpenAI ´ s founders originally approached him to fund a not-for-profit focused on establishing AI to benefit mankind, archmageriseswiki.com however that it is now concentrated on generating income. He later broadened the claim to add federal antitrust and other claims, and disgaeawiki.info in December asked the judge administering over the case to stop OpenAI from transitioning to a for-profit.

In reaction to Musk ´ s claim, OpenAI has said it will relocate to dismiss Musk ´ s claims which Musk „need to be competing in the market rather than the courtroom.“ The stakes on OpenAI’s corporate transition have actually now intensified, as OpenAI ´ s last fundraising round of $6.6 billion and a brand-new round of approximately $25 billion under conversation with SoftBank are conditioned on the business reorganizing to remove the not-for-profit ´ s control.

During the hearing, OpenAI’s legal representatives said the reason to permit OpenAI to become a for-profit entity is since it would be needed to facilitate the objective of the nonprofit.

Such a restructuring would be extremely unusual, said Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits. Nonprofit conversions to for-profits have traditionally been for healthcare companies like healthcare facilities, not venture capital-backed companies, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)