Judge Says Elon Musk's Claims of Harm from OpenAI Are A 'stretch'. - 182

OAKLAND, Calif. (AP) - Elon Musk's legal representatives faced off with OpenAI in court Tuesday as a federal judge weighed the billionaire's request for a court order that would obstruct the ChatGPT maker from converting itself to a for-profit company.

U.S. District Judge Yvonne Gonzalez Rogers said it was a "stretch" for Musk to claim he will be irreparably harmed if she doesn't step in to stop OpenAI from progressing with its transition from a not-for-profit research study laboratory to a for-profit corporation.

But the judge likewise raised issues about OpenAI and its relationship with organization partner Microsoft and said she wouldn't stop the case from transferring to trial as soon as next year so a jury can decide.

"It is possible that what Mr. Musk is saying holds true. We ´ ll learn. He ´ ll sit on the stand," she said.

Musk, an early OpenAI financier and board member, took legal action against the expert system company last year, first in a California state court and later on in federal court, declaring it had betrayed its founding aims as a nonprofit research laboratory benefiting the general public excellent. Musk had actually invested about $45 million in the start-up from its founding until 2018, his legal representative said Tuesday.

Musk intensified the legal conflict late last year, adding brand-new claims and offenders and requesting for a court order that would stop OpenAI ´ s prepares to convert itself into a for-profit company more fully. Musk likewise added his own AI business, xAI, as a plaintiff.

Also targeted by Musk's claim is OpenAI's close organization partner Microsoft and tech entrepreneur Reid Hoffman, a former OpenAI board member who likewise sits on Microsoft's board.

Gonzalez Rogers said she has a high bar for approving the type of initial injunction that Musk desires but hasn't yet ruled on the request. She did say she had "significant issues" with two people connected to Microsoft on OpenAI's board - Hoffman and long time Microsoft executive Deanna Templeton, who was a "non-voting observer."

"So you desire me to think that she was sitting there listening to all the conversations and not informing anybody? What would the point be for her to sit there and listen to everybody, if not to interact what she was listening? There would be no point for her to be there, which is why she actually ought to not exist," she said.

Hoffman, a co-founder of LinkedIn, has actually been on Microsoft ´ s board since shortly after the tech huge purchased the job networking website. He stepped down from OpenAI's board in 2023 to prevent disputes with his AI startup, Inflection.

Templeton, who Musk likewise named as an accused, was added as a non-voting member of OpenAI ´ s board in the after-effects of Altman ´ s ouster after Microsoft CEO Satya Nadella sought more stability on the board. But months later, she was dropped from the OpenAI board as U.S. antitrust enforcers were expressing concerns about such arrangements on corporate boards.

The judge has managed a variety of tech industry cases including Apple's battle with Epic Games, though she said Tuesday that Musk's case is "nothing like" that a person. That case was likewise the last time she approved an initial injunction, in 2020, 8 months before the case went to trial.

Then-President Barack Obama selected Gonzalez Rogers to the federal bench in 2011.

Tuesday's hearing was initially set for January but was held off after Musk's attorney Marc Toberoff said his house was ruined in the Pacific Palisades wildfire.

Musk, who did not participate in the hearing, has alleged in the claim that the business are breaking the terms of his fundamental contributions to the charity. Judge Gonzalez Rogers called it a "stretch" to claim "irreparable harm" to Musk, and called the case "billionaires vs. billionaires." She questioned why Musk invested tens of millions in OpenAI without a composed contract. Toberoff said it was since the relationship in between Altman and Musk at the time was "developed on trust" and the two were really close.

"That is simply a lot of money" to invest "on a handshake," the judge said.

OpenAI has said Musk ´ s requested court order would "cripple OpenAI ´ s organization"and mission to the advantage of Musk and his own AI business and is based upon "improbable" legal claims.

At the heart of the conflict is a 2017 internal power struggle at the recently established startup that caused Altman ending up being OpenAI ´ s CEO

. Emails revealed by OpenAI show Musk had actually likewise sought to be CEO and grew annoyed after 2 other OpenAI co-founders said he would hold excessive power as a significant shareholder and chief executive if the startup was successful in its goal to attain better-than-human AI called artificial basic intelligence, or AGI. Musk has long voiced concerns about how sophisticated types of AI might threaten mankind.

Altman eventually succeeded in ending up being CEO and has actually remained so other than for a duration in 2023 when he was fired and then renewed days later on after the board that ousted him was replaced.

OpenAI has actually looked for to demonstrate Musk ´ s early assistance for the concept of making OpenAI a for-profit organization so it could raise cash for the hardware and computer system power that AI needs.

Musk is not the only one tough OpenAI's for-profit shift. Facebook and Instagram moms and dad Meta Platforms has asked California's attorney general to block it, and the office of Delaware's chief law officer has said it is evaluating the conversion.

It was unclear Tuesday when the case might go to trial. Musk's lawyers initially said they would be ready by June after some with the two sides the judge indicated it probably won't be until June 2026 at the earliest, hb9lc.org however likely early 2027.

O'Brien reported from Providence, Rhode Island.

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