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 uncommon, specialist states

(Adds judge did not decide whether 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 against OpenAI to halt its conversion to a for-profit entity might 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 decide who is right.” Rogers was thinking about Musk’s current ask for a preliminary injunction to obstruct OpenAI’s conversion before going to trial, wiki-tb-service.com the most recent move in a grudge match between the world’s wealthiest individual and OpenAI CEO Sam Altman that is playing out openly in court.

Rogers did not decide whether to provide the injunction Tuesday, however at one point recommended that Musk’s legal group had actually not presented adequate proof for her to provide the injunction, and humanlove.stream indicated she may 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 established the completing AI start-up xAI in 2023. OpenAI is now trying to transition from a nonprofit into a for-profit entity, which it says it requires to do to secure the capital required to establish the very best synthetic intelligence designs. Last year, Musk filed a claim against OpenAI and Altman, stating that OpenAI ´ s founders originally approached him to fund a nonprofit focused on establishing AI to benefit humankind, but that it is now concentrated on generating income. He later expanded the claim to add 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 relocate to dismiss Musk ´ s claims which Musk “should be completing in the marketplace instead of the courtroom.” The stakes on OpenAI’s corporate transition have actually now intensified, as OpenAI ´ s last fundraising round of $6.6 billion and a brand-new round of up to $25 billion under conversation with SoftBank are conditioned on the company reorganizing to eliminate the not-for-profit ´ s manage.

During the hearing, OpenAI’s legal representatives said the factor to enable OpenAI to become a for-profit entity is because it would be essential to assist in the mission 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 historically been for healthcare organizations like hospitals, not endeavor capital-backed business, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)