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 required for capital
Nonprofit to for-profit conversion uncommon, professional says
(Adds judge did not choose whether to release 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 halt 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 decide who is right." Rogers was thinking about Musk's recent ask for a preliminary injunction to obstruct OpenAI's conversion before going to trial, asteroidsathome.net the newest move in a grudge match between the world's wealthiest person and townshipmarket.co.za OpenAI CEO Sam Altman that is playing out openly in court.
Rogers did not choose whether to provide the injunction Tuesday, wiki.eqoarevival.com but at one point recommended that Musk's legal group had actually not provided enough proof for her to release the injunction, wiki.asexuality.org and showed she might hold an evidentiary hearing, where both sides could 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, but left before the and subsequently founded the completing AI start-up xAI in 2023. OpenAI is now trying to shift from a not-for-profit into a for-profit entity, which it says it requires to do to secure the capital required to establish the very best artificial intelligence models. In 2015, Musk filed a claim against OpenAI and Altman, stating that OpenAI ´ s founders initially approached him to money a nonprofit focused on developing AI to benefit humankind, however that it is now concentrated on generating income. He later on broadened 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 reaction to Musk ´ s claim, OpenAI has said it will move to dismiss Musk ´ s claims which Musk "ought to be competing 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 approximately $25 billion under conversation with SoftBank are conditioned on the business restructuring to eliminate the nonprofit ´ s manage.
During the hearing, OpenAI's attorneys said the reason to permit OpenAI to become a for-profit entity is due to the fact that it would be required 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 traditionally been for healthcare companies like medical facilities, not endeavor capital-backed business, vmeste-so-vsemi.ru she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)