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, expert states
(Adds judge did not decide whether to issue the injunction in paragraph 5, OpenAi's lawyers' 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, adding that the Tesla CEO will need to appear in court and affirm.
"Something is going to trial in this case," U.S. District Judge Yvonne Gonzalez Rogers in Oakland, setiathome.berkeley.edu California, said early in the court session.
"(Elon Musk will) rest on the stand, present it to a jury, and a jury will choose who is right." Rogers was considering Musk's recent ask for an initial injunction to obstruct OpenAI's conversion before going to trial, wiki.vst.hs-furtwangen.de the current relocation in an animosity match in between the world's richest individual and OpenAI CEO Sam Altman that is playing out openly in court.
Rogers did not decide whether to provide the injunction Tuesday, nerdgaming.science but at one point recommended that Musk's legal group had actually not provided sufficient evidence for her to provide the injunction, and showed she may hold an evidentiary hearing, where both sides could present 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 subsequently established the competing AI startup xAI in 2023. OpenAI is now trying to transition from a not-for-profit into a for-profit entity, which it says it requires to do to protect the capital needed to establish the very best synthetic intelligence designs. In 2015, Musk submitted a claim against OpenAI and Altman, saying that OpenAI ´ s founders initially approached him to fund a nonprofit concentrated on developing AI to benefit mankind, but that it is now concentrated on making cash. He later on expanded the claim to include federal antitrust and other claims, and in December asked the judge administering over 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 which Musk "must be competing in the marketplace rather than the courtroom." The stakes on OpenAI's corporate shift have now escalated, as OpenAI ´ s last fundraising round of $6.6 billion and a brand-new round of up to $25 billion under with SoftBank are conditioned on the business reorganizing to get rid of the nonprofit ´ s manage.
During the hearing, OpenAI's lawyers said the factor to permit OpenAI to end up being a for-profit entity is due to the fact that it would be needed to help with the objective 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 actually historically been for health care companies 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)