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 uncommon, expert states
(Adds judge did not decide whether or not to issue the injunction in paragraph 5, OpenAi's legal representatives' comment in paragraph 13)
By Anna Tong and accc.rcec.sinica.edu.tw 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 may go to trial, including 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 considering Musk's recent ask for a preliminary injunction to obstruct OpenAI's conversion before going to trial, the current move in an animosity match between the world's richest individual and OpenAI CEO Sam Altman that is playing out publicly in court.
Rogers did not decide whether or not to provide the injunction Tuesday, however at one point recommended that Musk's legal team had actually not provided enough proof for her to release the injunction, and showed she may hold an evidentiary hearing, wiki.vst.hs-furtwangen.de where both sides might present witnesses and proof. The last time Rogers offered an initial injunction remained in Epic Games' case against Apple in May 2021.
Musk cofounded OpenAI with Altman in 2015, however left before the company removed and consequently established the competing AI startup xAI in 2023. OpenAI is now trying to from a not-for-profit into a for-profit entity, which it says it requires to do to protect the capital required to develop the best expert system models. Last year, Musk submitted a claim against OpenAI and Altman, stating that OpenAI ´ s founders originally approached him to fund a nonprofit concentrated on establishing AI to benefit mankind, however that it is now concentrated on earning money. He later 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 response to Musk ´ s claim, OpenAI has said it will relocate to dismiss Musk ´ s claims which Musk "ought to be contending 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 discussion with SoftBank are conditioned on the business reorganizing to remove the nonprofit ´ s manage.
During the hearing, OpenAI's legal representatives said the reason to enable OpenAI to become a for-profit entity is since it would be necessary to help with the objective of the not-for-profit.
Such a restructuring would be highly 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 companies like hospitals, not endeavor capital-backed companies, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)