Musk takes legal action against to block 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 or not to release the injunction in paragraph 5, OpenAi's legal representatives' 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 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 thinking about Musk's recent demand for a preliminary injunction to block OpenAI's conversion before going to trial, the most recent relocation 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 provide the injunction Tuesday, however at one point suggested that Musk's legal group had actually not provided enough proof for her to provide the injunction, and showed she might hold an evidentiary hearing, wolvesbaneuo.com where both sides might provide witnesses and evidence. The last time Rogers provided a preliminary injunction remained in Epic Games' case against Apple in May 2021.
Musk cofounded OpenAI with Altman in 2015, however left before the business took off and consequently the competing AI start-up xAI in 2023. OpenAI is now attempting to shift from a not-for-profit into a for-profit entity, which it says it needs to do to secure the capital needed to establish the best expert system designs. Last year, Musk submitted a claim against OpenAI and Altman, saying that OpenAI ´ s founders originally approached him to fund a nonprofit focused on establishing AI to benefit humankind, however that it is now focused on making money. He later on broadened the claim to add federal antitrust and other claims, and akropolistravel.com 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 which Musk "must be completing in the market instead of the courtroom." The stakes on OpenAI's business shift have now intensified, as OpenAI ´ s last fundraising round of $6.6 billion and a new round of approximately $25 billion under conversation with SoftBank are conditioned on the business restructuring to eliminate the not-for-profit ´ s manage.
During the hearing, OpenAI's lawyers said the reason to allow OpenAI to end up being a for-profit entity is since it would be essential to help with 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 actually historically been for healthcare companies like hospitals, not endeavor capital-backed business, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)