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 unusual, expert states
(Adds judge did not choose whether or not to provide the injunction in paragraph 5, OpenAi's attorneys' 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 may go to trial, adding 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, utahsyardsale.com 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 thinking about Musk's current ask for an initial injunction to block OpenAI's conversion before going to trial, the most recent move in an animosity match in between the world's wealthiest individual and OpenAI CEO Sam Altman that is playing out openly in court.
Rogers did not decide whether or not to release the injunction Tuesday, but at one point suggested that Musk's legal group had actually not provided enough evidence for her to provide the injunction, and showed 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, but left before the business took off and consequently founded the competing AI startup xAI in 2023. OpenAI is now attempting to shift from a not-for-profit into a for-profit entity, which it states it requires to do to secure the capital required to develop the finest expert system designs. Last year, Musk filed a claim against OpenAI and Altman, saying that OpenAI ´ s creators originally approached him to money a not-for-profit focused on developing AI to benefit humanity, but that it is now concentrated on generating income. He later on expanded the claim to add federal antitrust and 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 move to dismiss Musk ´ s claims which Musk "must be contending in the market rather than the courtroom." The stakes on OpenAI's business transition have actually now escalated, as OpenAI ´ s last fundraising round of $6.6 billion and a brand-new round of as much as $25 billion under discussion with SoftBank are conditioned on the business reorganizing to get rid of the nonprofit ´ s manage.
During the hearing, OpenAI's attorneys said the factor to allow OpenAI to become a for-profit entity is since it would be essential to assist in 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 Philanthropy and Nonprofits. Nonprofit conversions to for-profits have actually traditionally been for companies like medical facilities, not venture capital-backed companies, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)