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 move required for capital

Nonprofit to for-profit conversion unusual, professional says

(Adds judge did not decide whether to issue the injunction in paragraph 5, OpenAi’s attorneys’ remark in paragraph 13)

By Anna Tong and Akash Sriram

OAKLAND, Calif., akropolistravel.com 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 might go to trial, including that the Tesla CEO will have 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) sit on the stand, present it to a jury, and a jury will decide who is right.” Rogers was considering Musk’s recent demand for an initial injunction to obstruct OpenAI’s conversion before going to trial, the latest move in an animosity match in between the world’s richest person and OpenAI CEO Sam Altman that is playing out publicly in court.

Rogers did not choose whether or not to release the injunction Tuesday, but at one point recommended that Musk’s legal group had actually not provided adequate proof for trade-britanica.trade her to provide the injunction, and suggested she may hold an evidentiary hearing, where both sides might provide witnesses and evidence. The last time Rogers offered a preliminary injunction remained in Epic Games’ case against Apple in May 2021.

Musk cofounded OpenAI with Altman in 2015, wiki.vst.hs-furtwangen.de however left before the business removed and subsequently established the contending AI startup xAI in 2023. OpenAI is now trying to transition 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 artificial intelligence designs. In 2015, Musk filed a claim against OpenAI and Altman, stating that OpenAI ´ s approached him to fund a nonprofit focused on developing AI to benefit mankind, however that it is now concentrated on earning money. He later on broadened the claim to add federal antitrust and other claims, and 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 and that Musk “must 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 business restructuring to eliminate the not-for-profit ´ s control.

During the hearing, OpenAI’s legal representatives said the factor to allow OpenAI to end up being a for-profit entity is since it would be essential 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 historically been for health care organizations like hospitals, not venture capital-backed companies, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)