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 needed for capital

Nonprofit to for-profit conversion rare, specialist says

(Adds judge did not decide whether or not to release the injunction in paragraph 5, OpenAi’s lawyers’ comment in paragraph 13)

By and Akash Sriram

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

«Something is going to trial in this case,» U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, said early in the court session.

«(Elon Musk will) rest on the stand, present it to a jury, and a jury will choose who is right.» Rogers was considering Musk’s recent ask for a preliminary injunction to obstruct OpenAI’s conversion before going to trial, the current move in a grudge match between the world’s richest person and forum.batman.gainedge.org OpenAI CEO Sam Altman that is playing out openly in court.

Rogers did not decide whether to provide the injunction Tuesday, however at one point recommended that Musk’s legal group had actually not presented sufficient proof for her to issue the injunction, garagesale.es and suggested she may hold an evidentiary hearing, where both sides could present witnesses and evidence. The last time Rogers provided a preliminary 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 attempting to transition from a not-for-profit into a for-profit entity, which it says it requires to do to protect the capital required to establish the very best expert system models. Last year, Musk filed a claim against OpenAI and Altman, stating that OpenAI ´ s founders originally approached him to money a not-for-profit focused on establishing AI to benefit humankind, but that it is now focused on earning money. He later expanded the claim to include federal antitrust and systemcheck-wiki.de other claims, and wiki.rrtn.org in December asked the judge presiding over the case to stop OpenAI from transitioning to a for-profit.

In response to Musk ´ s claim, OpenAI has said it will move to dismiss Musk ´ s claims which Musk «ought to be competing in the market rather than the courtroom.» The stakes on OpenAI’s corporate transition have now intensified, as OpenAI ´ s last fundraising round of $6.6 billion and a new round of approximately $25 billion under discussion with SoftBank are conditioned on the company restructuring to remove the nonprofit ´ s manage.

During the hearing, OpenAI’s lawyers said the reason to allow OpenAI to become a for-profit entity is since it would be essential to facilitate the objective of the not-for-profit.

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