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 needed 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 lawyers' 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 stop 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) rest on the stand, present it to a jury, and a jury will decide who is right." Rogers was considering Musk's recent ask for a preliminary injunction to block OpenAI's conversion before going to trial, the most recent relocation in a grudge match in between the world's wealthiest person and OpenAI CEO Sam Altman that is playing out openly in court.
Rogers did not decide whether to issue the injunction Tuesday, however at one point suggested that Musk's legal group had actually not presented adequate evidence for her to provide the injunction, and suggested she may hold an evidentiary hearing, where both sides could provide witnesses and evidence. The last time Rogers provided an initial injunction remained in Epic Games' case against Apple in May 2021.
OpenAI with Altman in 2015, but left before the business took off and consequently founded the contending AI startup xAI in 2023. OpenAI is now attempting to transition from a nonprofit into a for-profit entity, which it says it needs to do to protect the capital required to establish the finest expert system designs. In 2015, Musk submitted a claim against OpenAI and Altman, saying that OpenAI ´ s creators originally approached him to fund a not-for-profit focused on developing AI to benefit humankind, but that it is now focused on generating income. He later on 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 reaction to Musk ´ s claim, OpenAI has said it will relocate to dismiss Musk ´ s claims and that Musk "should be contending in the market instead of the courtroom." The stakes on OpenAI's business shift have now escalated, annunciogratis.net as OpenAI ´ s last fundraising round of $6.6 billion and a new round of up to $25 billion under discussion with SoftBank are conditioned on the business restructuring to eliminate the nonprofit ´ s control.
During the hearing, OpenAI's attorneys said the reason to enable OpenAI to end up being a for-profit entity is due to the fact that it would be needed to assist in the objective of the nonprofit.
Such a restructuring would be highly unusual, shiapedia.1god.org said Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits. Nonprofit conversions to for-profits have traditionally been for health care companies like medical facilities, not endeavor capital-backed companies, wiki.rrtn.org she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)