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Musk takes legal action against to obstruct OpenAI's conversion to a for-profit structure

Musk cofounded OpenAI with Altman in 2015

OpenAI argues for-profit move required for capital

Nonprofit to for-profit conversion rare, professional states

(Adds judge did not choose whether or not to issue the injunction in paragraph 5, OpenAi's attorneys' comment in paragraph 13)

By Anna Tong and photorum.eclat-mauve.fr Akash Sriram

OAKLAND, forum.kepri.bawaslu.go.id 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 might go to trial, including that the Tesla CEO will have to appear in court and affirm.

"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 decide who is right." Rogers was considering Musk's recent request for a preliminary injunction to obstruct OpenAI's conversion before going to trial, the most recent relocation in an animosity match between the world's richest person and OpenAI CEO Sam Altman that is playing out openly in court.

Rogers did not choose whether to provide the injunction Tuesday, but at one point suggested that Musk's legal team had actually not provided enough evidence for her to release the injunction, and showed she might hold an evidentiary hearing, where both sides could provide 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 established 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 requires to do to secure the capital required to develop the very best synthetic intelligence models. Last year, Musk submitted a claim against OpenAI and Altman, stating that OpenAI ´ s founders initially approached him to fund a nonprofit focused on developing AI to benefit mankind, however that it is now focused on earning money. He later broadened the claim to add 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 transfer to dismiss Musk ´ s claims which Musk "must be competing in the market instead of the courtroom." The stakes on OpenAI's business transition have actually now intensified, as OpenAI ´ s last fundraising round of $6.6 billion and a new round of as much as $25 billion under conversation with SoftBank are conditioned on the company restructuring to remove the nonprofit ´ s control.

During the hearing, OpenAI's lawyers said the reason to allow OpenAI to become a for-profit entity is since it would be essential to facilitate the mission of the not-for-profit.

Such a restructuring would be highly uncommon, 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 health centers, not endeavor capital-backed companies, forum.pinoo.com.tr she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)

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