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, specialist says
(Adds judge did not choose whether to provide 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 halt its conversion to a for-profit entity may go to trial, tandme.co.uk 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, 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 current ask for a preliminary injunction to block OpenAI's conversion before going to trial, the most recent move in an animosity match in between the world's wealthiest person and OpenAI CEO Sam Altman that is playing out publicly in court.
Rogers did not choose whether to release the injunction Tuesday, however at one point recommended that Musk's legal group had actually not provided enough proof for her to issue the injunction, and suggested she may hold an evidentiary hearing, where both sides might present witnesses and evidence. 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 company took off and subsequently founded the contending AI startup xAI in 2023. OpenAI is now attempting to shift from a not-for-profit into a for-profit entity, which it says it needs to do to protect the capital required to establish the best expert system designs. In 2015, Musk filed a claim against OpenAI and Altman, saying that OpenAI ´ s creators initially 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 expanded the claim to add 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 reaction to Musk ´ s claim, OpenAI has said it will transfer to dismiss Musk ´ s claims which Musk "should be completing in the market instead of the courtroom." The stakes on OpenAI's corporate transition have now intensified, as OpenAI ´ s last fundraising round of $6.6 billion and a brand-new round of approximately $25 billion under discussion with SoftBank are conditioned on the company restructuring to eliminate the nonprofit ´ s manage.
During the hearing, OpenAI's lawyers said the reason to allow OpenAI to end up being a for-profit entity is due to the fact that it would be necessary to assist in the mission of the not-for-profit.
Such a restructuring would be highly uncommon, said Rose Chan Loui, of the UCLA Law Center for Philanthropy and Nonprofits. Nonprofit conversions to for-profits have actually traditionally been for healthcare companies like healthcare facilities, not venture capital-backed companies, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)
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Musk's Claim against OpenAI May go to Trial In Part, Judge Says
Alba Anthony edited this page 2025-02-09 22:02:13 +01:00