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

by Etta Patrick (2025-02-09)

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OAKLAND, Calif. (AP) - Elon Musk's attorneys faced off with OpenAI in court Tuesday as a federal judge weighed the billionaire's request for a court order that would block 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 moving forward with its shift from a nonprofit research lab to a for-profit corporation.


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


"It is possible that what Mr. Musk is stating holds true. We ´ ll discover. He ´ ll rest on the stand," she said.


Musk, wolvesbaneuo.com an early OpenAI investor and board member, took legal action against the expert system business last year, initially 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 public good. Musk had invested about $45 million in the start-up from its founding up until 2018, systemcheck-wiki.de his lawyer said Tuesday.

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Musk intensified the legal conflict late in 2015, adding new claims and offenders and asking for a court order that would stop OpenAI ´ s plans to convert itself into a for-profit organization more totally. Musk also added his own AI company, xAI, as a plaintiff.

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Also targeted by Musk's claim is OpenAI's close company 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 authorizing the type of initial injunction that Musk wants but hasn't yet ruled on the request. She did say she had "significant concerns" with 2 individuals linked to Microsoft on OpenAI's board - Hoffman and long time Microsoft executive Deanna Templeton, who was a "non-voting observer."


"So you want me to believe that she was sitting there listening to all the conversations and not telling anyone? 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 really needs to not exist," she said.

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


Templeton, who Musk also called as an offender, 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 issues about such plans on business boards.


The judge has actually handled a number of tech market cases consisting of Apple's battle with Epic Games, though she said Tuesday that Musk's case is "nothing like" that a person. That case was also the last time she gave an initial injunction, in 2020, eight months before the case went to trial.


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

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Tuesday's hearing was initially set for January however was postponed after Musk's attorney Marc Toberoff said his house was destroyed in the Pacific Palisades wildfire.


Musk, who did not participate in the hearing, has declared in the claim that the companies are breaching 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 written agreement. Toberoff said it was due to the fact that the relationship in between Altman and Musk at the time was "built on trust" and the two were very close.


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


OpenAI has actually said Musk ´ s requested court order would "cripple OpenAI ´ s business"and mission to the advantage of Musk and his own AI business and visualchemy.gallery is based upon "far-fetched" legal claims.

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At the heart of the dispute is a 2017 internal power battle at the new start-up that resulted in Altman ending up being OpenAI ´ s CEO


. Emails revealed by OpenAI show Musk had also sought to be CEO and grew annoyed after two other OpenAI co-founders said he would hold too much power as a significant shareholder and primary executive if the startup prospered in its goal to attain better-than-human AI known as artificial basic intelligence, or AGI. Musk has long voiced issues about how innovative types of AI could threaten humanity.

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Altman ultimately prospered in becoming CEO and has actually remained so except for a period in 2023 when he was fired and after that restored days later on after the board that ousted him was replaced.


OpenAI has sought to demonstrate Musk ´ s early support for the idea of making OpenAI a for-profit service so it might raise cash for the hardware and computer system power that AI needs.


Musk is not the only one tough OpenAI's for-profit transition. Facebook and Instagram moms and dad Meta Platforms has asked California's chief law officer to obstruct it, and oke.zone the office of Delaware's lawyer general has said it is reviewing the conversion.


It was unclear Tuesday when the case might go to trial. Musk's attorneys at first said they would be prepared by June after some back-and-forth with the 2 sides the judge indicated it probably will not be up until June 2026 at the earliest, but likely early 2027.


O'Brien reported from Providence, Rhode Island.


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