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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, specialist says

(Adds judge did not decide whether to release the injunction in paragraph 5, OpenAi's attorneys' remark 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 testify.

"Something is going to trial in this case," U.S. District Judge Yvonne Gonzalez Rogers in Oakland, bbarlock.com 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 current ask for an initial injunction to block OpenAI's conversion before going to trial, the current relocation in a grudge match in between the world's richest individual 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 recommended that Musk's legal group had not presented enough evidence for her to provide the injunction, bahnreise-wiki.de and suggested she might hold an evidentiary hearing, where both sides might provide witnesses and proof. The last time Rogers offered a preliminary injunction remained in Epic Games' case against Apple in May 2021.

Musk cofounded OpenAI with Altman in 2015, but left before the business took off and subsequently established the competing AI startup xAI in 2023. OpenAI is now trying to transition from a nonprofit into a entity, which it says it requires to do to protect the capital required to establish the best synthetic intelligence models. In 2015, Musk filed a claim against OpenAI and Altman, stating that OpenAI ´ s creators originally approached him to fund a not-for-profit concentrated on establishing AI to benefit humanity, however that it is now focused on generating income. 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 move to dismiss Musk ´ s claims and bybio.co that Musk "should be competing in the market instead of the courtroom." The stakes on OpenAI's corporate transition have actually now escalated, as OpenAI ´ s last fundraising round of $6.6 billion and a brand-new round of as much as $25 billion under conversation with SoftBank are conditioned on the business reorganizing to remove the nonprofit ´ s control.

During the hearing, OpenAI's legal representatives said the reason to permit OpenAI to end up being a for-profit entity is since it would be required to help with the mission of the not-for-profit.

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