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 needed for capital
Nonprofit to for-profit conversion rare, professional says
(Adds judge did not decide whether to release the injunction in paragraph 5, OpenAi's lawyers' 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 may 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, 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 block OpenAI's conversion before going to trial, the current relocation in a grudge match in between the world's richest person and OpenAI CEO Sam Altman that is playing out publicly in court.
Rogers did not decide whether to provide the injunction Tuesday, but at one point recommended that Musk's legal team had actually not provided adequate proof for her to issue the injunction, and showed she might hold an evidentiary hearing, where both sides might present witnesses and evidence. The last time Rogers supplied an initial injunction remained in Epic Games' case against Apple in May 2021.
Musk cofounded OpenAI with Altman in 2015, but left before the company took off and subsequently founded the completing AI start-up xAI in 2023. OpenAI is now attempting to shift from a not-for-profit into a for-profit entity, wiki.eqoarevival.com which it states it requires to do to secure the capital needed to establish the very best synthetic intelligence models. In 2015, Musk submitted a claim against OpenAI and Altman, saying that OpenAI ´ s creators initially approached him to money a not-for-profit focused on developing AI to benefit humankind, however that it is now concentrated on generating income. He later expanded the claim to include federal antitrust and other claims, and in December asked the judge commanding the case to stop OpenAI from transitioning to a for-profit.
In response to Musk ´ s claim, OpenAI has said it will transfer to dismiss Musk ´ s claims which Musk "need to be contending in the market rather than the courtroom." The stakes on OpenAI's business shift have now intensified, as OpenAI ´ s last fundraising round of $6.6 billion and a brand-new round of up to $25 billion under discussion with SoftBank are conditioned on the business restructuring to remove the nonprofit ´ s manage.
During the hearing, OpenAI's lawyers said the reason to allow OpenAI to end up being a for-profit entity is because it would be needed to help with the mission of the not-for-profit.
Such a restructuring would be extremely uncommon, said Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits. Nonprofit conversions to for-profits have actually been for health care organizations like hospitals, not venture capital-backed business, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)