SAN FRANCISCO, CALIFORNIA—
A US judge on Tuesday denied Elon Musk’s request to prevent OpenAI from becoming a for-profit company, in a loss for the Tesla mogul amid his dispute with Sam Altman.
US District Court Judge Yvonne González Rogers ruled that Musk and his startup xAI failed to show that an injunction against OpenAI was necessary while the case goes to trial.
Musk filed a lawsuit in federal court in California to block OpenAI from converting from a nonprofit to a for-profit company, arguing that the startup violated antitrust law and betrayed his trust in his mission as co-founder of OpenAI.
The judge wrote that while Musk has not shown a need for an injunction, she is willing to expedite a trial on that claim later this year.
The ruling leaves OpenAI free to continue its transition from nonprofit to for-profit company.
Musk’s court order argued that OpenAI’s co-founders, including CEO Altman, “took advantage of Musk’s altruism to entice him to fund the company,” according to court documents.
Musk maintained in his filings that it was clear that his support for OpenAI was dependent on it remaining a nonprofit, and he offered some email exchanges to back up the claim.
“It is arguable whether Musk’s emails and social media posts constitute sufficient writing to constitute an actual contract or charitable trust between the parties,” the judge said in her ruling.
The chairman of OpenAI’s board of directors rejected a Musk-led offer to buy the valuable artificial intelligence company for $97.4 billion in February.
“OpenAI is not for sale, and the board of directors has unanimously rejected Mr. Musk’s latest attempt to disrupt its competition,” OpenAI board chairman Bret Taylor said in a statement posted by the company on Musk-owned X, formerly Twitter.
OpenAI currently operates in a hybrid structure, as a nonprofit organization with a money-making subsidiary.
The shift to a for-profit model, which Altman said is crucial to the company’s development, has exacerbated current tensions with Musk.
Musk and Altman were part of the 11-person team that founded OpenAI in 2015, with the former providing seed funding of $45 million.
Three years later, Musk left the company, with OpenAI citing “potential future conflict for Elon… as Tesla continues to focus more on AI.”
Musk established his own artificial intelligence company, called xAI, in early 2023 after OpenAI ignited global fervor for the technology.
The enormous cost of designing, training and deploying AI models has forced OpenAI to look for a new corporate structure that provides capital to investors and provides more stable governance.
