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 archmageriseswiki.com capital
Nonprofit to for-profit conversion rare, specialist states
(Adds judge did not choose whether to provide the injunction in paragraph 5, OpenAi's lawyers' comment 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 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) sit on the stand, present it to a jury, and a jury will choose who is right." Rogers was considering Musk's current ask for an initial injunction to block OpenAI's conversion before going to trial, the most recent relocation in a grudge match between the world's wealthiest 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 recommended that Musk's legal group had actually not provided sufficient proof for her to issue the injunction, and showed she might hold an evidentiary hearing, where both sides could provide witnesses and proof. 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 business removed and consequently founded the competing AI startup xAI in 2023. OpenAI is now trying to transition from a nonprofit into a for-profit entity, which it says it needs to do to protect the capital needed to develop the very best expert system designs. Last year, Musk submitted 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 humankind, but that it is now concentrated on making cash. He later broadened the claim to include 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 ´ s claims and that Musk "ought to be contending in the marketplace rather than the courtroom." The stakes on OpenAI's business shift have actually now escalated, as OpenAI ´ s last fundraising round of $6.6 billion and a brand-new round of up to $25 billion under discussion with SoftBank are conditioned on the business restructuring to get rid of the not-for-profit ´ s control.
During the hearing, OpenAI's attorneys said the factor to enable OpenAI to become a for-profit entity is because it would be essential to facilitate the mission of the nonprofit.
Such a restructuring would be highly unusual, said Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits. Nonprofit conversions to for-profits have actually traditionally been for healthcare companies like medical facilities, not venture capital-backed business, 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
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