mmafa

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 rare, specialist states

(Adds judge did not decide whether or not to release the injunction in paragraph 5, OpenAi's legal representatives' 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 stop its conversion to a for-profit entity may 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) rest on the stand, present it to a jury, and a jury will decide who is right." Rogers was thinking about Musk's current demand for an initial injunction to block OpenAI's conversion before going to trial, the most current move in a grudge match between the world's richest individual and OpenAI CEO Sam Altman that is playing out openly in court.

Rogers did not decide whether or not to issue the injunction Tuesday, but at one point suggested that Musk's legal group had actually not provided sufficient proof for her to provide the injunction, and suggested she may hold an evidentiary hearing, addsub.wiki where both sides could provide witnesses and evidence. The last time Rogers provided an initial 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 consequently founded the completing AI start-up xAI in 2023. OpenAI is now trying to transition 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 best artificial intelligence models. Last year, Musk submitted a claim against OpenAI and Altman, stating that OpenAI ´ s founders originally approached him to fund a not-for-profit concentrated on developing AI to benefit humanity, but that it is now focused on earning money. He later broadened 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 action to Musk ´ s claim, OpenAI has said it will relocate to dismiss Musk ´ s claims which Musk "must be competing in the market rather than the courtroom." The stakes on OpenAI's business shift have now escalated, as OpenAI ´ s last fundraising round of $6.6 billion and a brand-new round of approximately $25 billion under conversation with SoftBank are conditioned on the business reorganizing to eliminate the nonprofit ´ s control.

During the hearing, OpenAI's lawyers said the factor to enable OpenAI to end up being a for-profit entity is due to the fact that it would be essential to help with the objective of the not-for-profit.

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