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 needed for capital
Nonprofit to for-profit conversion unusual, professional says
(Adds judge did not choose 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 might go to trial, including 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 thinking about Musk's recent demand for an initial injunction to obstruct OpenAI's conversion before going to trial, the most recent move in a grudge match between the world's richest person and OpenAI CEO Sam Altman that is playing out openly in court.
Rogers did not choose whether or not to provide the injunction Tuesday, however at one point recommended that Musk's legal team had actually not provided sufficient evidence for her to release the injunction, and indicated she might hold an evidentiary hearing, where both sides might provide witnesses and proof. 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 business took off and consequently established the contending 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 needs to do to secure the capital required to develop the very best expert system models. In 2015, Musk filed a claim against OpenAI and Altman, stating that OpenAI ´ s creators originally approached him to fund a not-for-profit concentrated on establishing AI to benefit humankind, but that it is now focused on generating income. He later 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 response to Musk ´ s claim, OpenAI has said it will move to dismiss Musk ´ s claims and that Musk "should be contending in the market rather than the courtroom." The stakes on OpenAI's corporate shift have now intensified, asteroidsathome.net as OpenAI ´ s last fundraising round of $6.6 billion and menwiki.men a new round of as much as $25 billion under discussion with SoftBank are conditioned on the business reorganizing to eliminate the not-for-profit ´ s manage.
During the hearing, OpenAI's legal said the reason to allow OpenAI to end up being a for-profit entity is due to the fact that it would be essential to facilitate the mission of the nonprofit.
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 historically been for healthcare organizations like healthcare facilities, not venture capital-backed business, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)