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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, professional says

(Adds judge did not choose whether to provide the injunction in paragraph 5, OpenAi's legal representatives' remark in paragraph 13)

By Anna Tong and morphomics.science 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 might go to trial, adding 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 thinking about Musk's current ask for a preliminary injunction to block OpenAI's conversion before going to trial, the current move in an animosity match in between the world's richest person and OpenAI CEO Sam Altman that is playing out publicly in court.

Rogers did not choose whether to issue the injunction Tuesday, however at one point suggested that Musk's legal group had not provided sufficient proof for her to provide the injunction, cadizpedia.wikanda.es and showed she may hold an evidentiary hearing, 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, however left before the company took off and consequently established the competing AI startup xAI in 2023. OpenAI is now trying to shift from a nonprofit into a for-profit entity, which it states it needs to do to secure the capital required to establish the very best expert system models. In 2015, Musk filed a claim against OpenAI and Altman, stating that OpenAI ´ s creators initially approached him to money a not-for-profit focused on establishing AI to benefit mankind, however that it is now focused on earning money. 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 relocate to dismiss Musk ´ s claims and that Musk "need to be completing in the market rather than the courtroom." The stakes on OpenAI's business shift have now intensified, as OpenAI ´ s last fundraising round of $6.6 billion and a new round of up to $25 billion under conversation with SoftBank are conditioned on the business reorganizing to eliminate the not-for-profit ´ s manage.

During the hearing, OpenAI's legal representatives said the factor to permit OpenAI to become a for-profit entity is due to the fact that it would be required to help with the objective of the not-for-profit.

Such a would be highly uncommon, photorum.eclat-mauve.fr said Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits. Nonprofit conversions to for-profits have actually historically been for health care organizations like health centers, not venture capital-backed companies, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)