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 needed for capital

Nonprofit to for-profit conversion rare, specialist 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 townshipmarket.co.za 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) sit on the stand, present it to a jury, and a jury will decide who is right." Rogers was considering Musk's recent ask for an initial injunction to block OpenAI's conversion before going to trial, the current move in an animosity match in 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 suggested that Musk's legal team had not provided adequate proof for her to provide the injunction, and showed she might hold an evidentiary hearing, where both sides could present witnesses and evidence. The last time Rogers supplied a preliminary injunction remained in Epic Games' case against Apple in May 2021.

Musk cofounded OpenAI with Altman in 2015, however left before the company took off and consequently founded the contending AI startup xAI in 2023. OpenAI is now trying 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 develop the very best synthetic intelligence models. Last year, Musk filed a claim against OpenAI and Altman, saying that OpenAI ´ s founders initially approached him to money a not-for-profit concentrated on developing AI to benefit humanity, however that it is now concentrated on generating income. He later on broadened the claim to include federal antitrust and other claims, galgbtqhistoryproject.org and bbarlock.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 move to dismiss Musk ´ s claims and systemcheck-wiki.de that Musk "need to be contending in the marketplace instead of the courtroom." The stakes on OpenAI's business shift have actually now escalated, 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 to get rid of the nonprofit ´ s control.

During the hearing, OpenAI's legal representatives said the factor yewiki.org to enable OpenAI to end up being a for-profit entity is since it would be needed to facilitate the objective of the nonprofit.

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 actually traditionally been for healthcare companies like hospitals, not venture capital-backed business, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)