Musk's Claim against OpenAI May go to Trial In Part, Judge Says
Musk takes legal action against to obstruct OpenAI's conversion to a for-profit structure
Musk cofounded OpenAI with Altman in 2015
OpenAI argues for-profit relocation required for capital
Nonprofit to for-profit conversion uncommon, professional says
(Adds judge did not decide whether to provide the injunction in paragraph 5, comment 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 affirm.
"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 current request for a preliminary injunction to obstruct OpenAI's conversion before going to trial, the current move in an animosity match in between the world's wealthiest person and OpenAI CEO Sam Altman that is playing out publicly in court.
Rogers did not choose whether or not to issue the injunction Tuesday, but at one point suggested that Musk's legal team had not presented adequate evidence for her to provide the injunction, and indicated she might hold an evidentiary hearing, where both sides could provide witnesses and proof. 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 subsequently founded the contending AI start-up xAI in 2023. OpenAI is now attempting to shift from a not-for-profit into a for-profit entity, which it states it needs to do to secure the capital needed to develop the very best expert system models. In 2015, Musk submitted a claim against OpenAI and Altman, stating that OpenAI ´ s founders originally approached him to fund a nonprofit concentrated on establishing AI to benefit humankind, but that it is now focused on generating income. He later broadened the claim to add federal antitrust and valetinowiki.racing other claims, and 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 transfer to dismiss Musk ´ s claims and it-viking.ch that Musk "ought to be contending in the marketplace rather than the courtroom." The stakes on OpenAI's corporate transition have actually now escalated, as OpenAI ´ s last fundraising round of $6.6 billion and a new round of as much as $25 billion under conversation with SoftBank are conditioned on the business reorganizing to remove the nonprofit ´ s manage.
During the hearing, OpenAI's lawyers said the factor to allow OpenAI to become a for-profit entity is because it would be required to facilitate the mission of the not-for-profit.
Such a restructuring would be highly uncommon, 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 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)