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 relocation required for capital
Nonprofit to for-profit conversion uncommon, specialist says
(Adds judge did not choose 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 Musk's claim against OpenAI to stop its conversion to a for-profit entity might go to trial, adding that the Tesla CEO will have 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) sit on the stand, present it to a jury, and a jury will choose who is right." Rogers was thinking about Musk's recent ask for an initial injunction to obstruct OpenAI's conversion before going to trial, koha-community.cz the latest relocation in a grudge match between the world's wealthiest person and OpenAI CEO Sam Altman that is playing out publicly in court.
Rogers did not decide whether or not to issue the injunction Tuesday, but at one point recommended that Musk's legal team had actually not provided enough evidence for her to release the injunction, and showed she may hold an evidentiary hearing, where both sides could 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, visualchemy.gallery however left before the company removed and subsequently established the competing AI startup xAI in 2023. OpenAI is now attempting to transition from a not-for-profit into a for-profit entity, which it states it needs to do to protect the capital required to establish the finest synthetic intelligence models. Last year, a claim against OpenAI and Altman, stating that OpenAI ´ s creators originally approached him to money a not-for-profit concentrated on establishing AI to benefit mankind, but that it is now focused on making cash. He later on 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 transfer to dismiss Musk ´ s claims and kenpoguy.com that Musk "must be contending in the market rather than 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 new round of as much as $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 factor to permit OpenAI to end up being a for-profit entity is because it would be required to help with the mission of the nonprofit.
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 actually traditionally been for healthcare companies like healthcare facilities, not venture capital-backed companies, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)