Judge Denies Musk's Bid to Block OpenAI's For-Profit Transition, Lawsuit Continues

Musk Fails to Block OpenAI Restructuring Plans in Court Fight

Elon Musk failed to halt Sam Altman from restructuring OpenAI while he pursues claims that the startup has run afoul of antitrust laws, another blow for the world's richest person after his $97.4 billion offer to take control of the rival artificial intelligence company was rebuffed. US District Judge Yvonne Gonzalez Rogers on Tuesday denied Musk's request for an injunction that would pause the ChatGPT maker's transformation from a nonprofit to a more conventional, public benefit for-profit company. The ruling comes shortly after Altman called the billionaire's takeover bid an attempt to slow down the company as it competes with Musk's own startup, xAI.

Judge denies Musk's attempt to block OpenAI from becoming for-profit entity

A federal judge in California denied Elon Musk's effort to halt OpenAI's transformation into a for-profit entity, according to a filing on Tuesday. The court said the plaintiffs "failed to meet their burden of proof for the extraordinary relief requested." However, other aspects of Musk's lawsuit against the artificial intelligence startup that he co-founded with Sam Altman and others can proceed, the filing said. OpenAI, which was created as a nonprofit AI research lab in 2015, has been commercializing products in recent years, most notably its viral ChatGPT chatbot. The company is still overseen by a nonprofit parent and has faced significant hurdles in its goal to restructure into a for-profit, due largely to Musk, who has become one of Altman's chief adversaries. In November, attorneys representing Musk, his startup xAI, and former OpenAI board member Shivon Zilis filed for a preliminary injunction against the company's for-profit pursuits. The request marked an escalation in the legal feud between the sides that started when Musk sued OpenAI in March 2024 for breach of contract and fiduciary duty. The case was eventually withdrawn from state court and refiled in federal court, with Musk expanding the complaint to include claims that Microsoft and OpenAI had violated antitrust laws when the ChatGPT maker allegedly asked investors to agree to not invest in rival companies, including xAI. In posts on X, Musk has described OpenAI's efforts to convert to a for-profit corporation as a "total scam" and claimed that "OpenAI is evil." In December, OpenAI clapped back, alleging that in 2017 Musk "not only wanted, but actually created, a for-profit" to serve as the company's proposed new structure. OpenAI also said in December that in moving toward a new for-profit structure in 2025, the company would create a public benefit corporation to oversee commercial operations, removing some of its nonprofit restrictions and allowing it to function more like a high-growth startup. "The hundreds of billions of dollars that major companies are now investing into AI development show what it will really take for OpenAI to continue pursuing the mission," OpenAI's board wrote in a post at the time. Last month, a Musk-led investor group offered to buy control of OpenAI for $97.4 billion. The offer was for the nonprofit overseeing the company. "It's time for OpenAI to return to the open-source, safety-focused force for good it once was," Musk's attorney, Marc Toberoff, said in a statement following the bid. Altman rebuffed the offer, telling CNBC that the move is just an effort by Musk to "slow down a competitor." Musk said in a court filing a few days later that he would withdraw his effort if OpenAI stops its conversion into a for-profit entity.

Judge Rejects Musk's Bid to Block OpenAI's For-Profit Shift, But Lawsuit Continues

Judge Rules Against Musk's Attempt to Halt OpenAI's For-Profit Shift A federal judge in California has denied Elon Musk's attempt to stop OpenAI from transitioning into a for-profit entity. Issued on Tuesday, the decision stated that Musk and his legal team failed to meet the necessary legal burden to justify the request. However, other aspects of the lawsuit will continue. Elon co-founded OpenAI in 2015. Since then, he has been vocal about his concerns over its . He claims that the company has strayed from its original objective as a nonprofit focused on artificial intelligence research. In March 2024, he filed a lawsuit accusing OpenAI of breach of contract and fiduciary duty. known for its ChatGPT chatbot, has increasingly commercialized its technology in recent years. The company remains under the control of a nonprofit parent but is moving toward a new structure. In response, Musk has been one of the most outspoken critics of OpenAI CEO Sam Altman and the company's leadership. In November 2024 Musk and his legal team filed for a preliminary injunction to block OpenAI from becoming a for-profit company. The request was part of a larger legal battle that expanded in federal court to include claims of antitrust violations. Musk accused OpenAI and Microsoft of restricting competition by preventing investors from supporting rival AI startups, including his own company, xAI. In December, OpenAI defended its restructuring plans. The company argued that Musk had initially supported the idea of a for-profit model in 2017. OpenAI later announced its intention to create a public benefit corporation, allowing it to attract more funding while maintaining aspects of its nonprofit mission. Last month, Musk and an investor group offered to buy OpenAI for. He later stated that he would withdraw the offer if OpenAI abandoned its transition to a for-profit model. The legal dispute is far from over despite the court's ruling. The federal court will proceed with Musk's lawsuit against OpenAI on his claims regarding contract violations and antitrust breaches.

Judge rejects Musk's bid to block OpenAI's for-profit transition

March 4 (Reuters) - A U.S. court on Tuesday denied billionaire entrepreneur Elon Musk a preliminary injunction he was seeking against ChatGPT-maker OpenAI's efforts to convert into a for-profit firm. U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California said Musk has not met "the high burden required for a preliminary injunction" to block the conversion of OpenAI to a for-profit status. However, Rogers said that she is prepared to expedite a trial on the issue to later this year. OpenAI, Musk and Microsoft, which backs OpenAI, did not immediately respond to Reuters' requests for comment. OpenAI has been trying to transition from a nonprofit into a for-profit entity, which it says it needs to do to secure the capital required to develop the best artificial intelligence models. Musk filed a lawsuit against OpenAI and its CEO Sam Altman last year, saying OpenAI's founders originally approached him to fund a nonprofit focused on developing AI to benefit humanity, but that it is now focused on making money. He later expanded the lawsuit to add federal antitrust and other claims, and in December asked the judge presiding over the case to stop OpenAI's transition into a for-profit. Musk cofounded OpenAI with Altman in 2015, but left before the company took off and subsequently founded competing AI startup xAI in 2023. (Reporting by Gnaneshwar Rajan in Bengaluru; Editing by Varun H K)

Judge denies Musk's attempt to immediately block OpenAI's conversion to for-profit entity

Elon Musk's attempt to immediately halt OpenAI's conversion to a for-profit company was struck down by a US federal court on Tuesday, although the broader trial was expedited to this autumn. OpenAI is in the process of converting from a complex non-profit structure into a more conventional for-profit company. Musk sought to derail that process late last year, claiming OpenAI and its founder Sam Altman had behaved in an anti-competitive manner and betrayed the group's founding mission by pursuing artificial intelligence for a profit rather than the public benefit. On that basis, Musk requested an injunction to pause the process while his litigation played out. Judge Yvonne Gonzalez Rogers, of the Northern District of California, dismissed all four arguments underpinning Musk's injunction request, writing that they "failed to meet their burden of proof for the extraordinary relief requested". Musk claimed OpenAI had broken antitrust rules by asking investors in the company to avoid backing rivals, and that the company's conversion is in breach of its commitments to early donors, including Musk himself. But, Gonzalez Rogers added the court would expedite a trial to the autumn of this year on Musk's claim that OpenAI's conversion is unlawful, on the basis of "the public interest at stake and potential for harm if a conversion contrary to law occurred". The case is one in a series of salvos launched by the world's richest man against OpenAI in recent months. Last year, Musk filed a lawsuit against Altman, OpenAI and its chief backer Microsoft for breach of contract, and last month made a surprise $97.4bn bid for effective control over the company. Musk and Altman are competing for dominance in AI, a field that both have said they expect to transform economic activity and society. Musk, the billionaire Tesla chief executive, set up a rival company, xAI, in 2023. That start-up rapidly raised well more than $10bn and built one of the largest data centres in the world to train new AI models. The feud has a personal dimension: Musk co-founded OpenAI in 2015 and donated about $45mn to the company, before leaving the board in 2018 after clashing with Altman. Musk has since accused Altman of "perfidy and deceit [of] Shakespearean proportions" and described him as "swindly Sam". Altman in return has said: "I feel for the guy. I don't think he's like a happy person." Musk's claim that Altman behaved in an anti-competitive manner by asking investors to avoid backing rival AI start-ups, including xAI, was central to the injunction request. Gonzalez Rogers dismissed that claim, citing Altman's declaration to the court, which said he had not told investors that backing OpenAI meant they could not invest in rivals. Instead, Altman said he had only indicated that "certain investors who were to be granted access to OpenAI's confidential information on an ongoing basis were informed that OpenAI would need to terminate their rights to that information if they made non-passive investments in OpenAI's competitors". Musk claimed Altman and fellow OpenAI co-founder Greg Brockman "took advantage of Musk's altruism in order to lure him into funding the venture", according to Tuesday's court filing. But Gonzalez Rogers also denied an injunction on the basis that Altman and Brockman had breached a contract with Musk by pushing to convert to a for-profit company. OpenAI and Musk's attorney did not immediately respond to a request for comment.

US court denies Musk preliminary injunction in his suit against OpenAI

March 4 (Reuters) - A U.S. court on Tuesday denied billionaire entrepreneur Elon Musk a preliminary injunction he was seeking against ChatGPT-maker OpenAI's efforts to convert into a for-profit firm. U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California said she is prepared to expedite a trial on the issue of conversion to later this year. OpenAI, Microsoft and Musk did not immediately respond to Reuters' requests for comment. Last year, Musk filed a lawsuit against OpenAI and its CEO Sam Altman, saying that OpenAI's founders originally approached him to fund a nonprofit focused on developing artificial intelligence to benefit humanity, but that it is now focused on making money. OpenAI has been trying to transition from a nonprofit into a for-profit entity, which it says it needs to do to secure the capital required to develop the best AI models. Reporting by Gnaneshwar Rajan in Bengaluru; Editing by Varun H K Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Judge rejects Musk's attempt to block OpenAI's for-profit transition | TechCrunch

A federal judge in Northern California denied Elon Musk's motion for an injunction that would have halted OpenAI's planned transition into a for-profit company, Bloomberg reported. Musk failed to provide enough evidence necessary for an injunction, U.S. District Court Judge Yvonne Gonzalez Rogers ruled Tuesday. However, Rogers said the court is prepared to hold an expedited trial solely based on the claim that OpenAI's conversion plan is unlawful, noting that "irreparable harm is incurred when the public's money is used to fund a non-profit's conversion into a for-profit." The ruling marks the latest turn in Musk's lawsuit against OpenAI and its CEO Sam Altman, which accuses the ChatGPT maker of abandoning its original nonprofit mission to make the fruits of AI research available to all. Just a few weeks ago, Musk submitted an unsolicited takeover bid to purchase OpenAI for $97.4 billion, an offer OpenAI's board unanimously rejected. That said, the bid may create future headaches for OpenAI as it tries to adopt a more conventional corporate structure.

Judge denies Elon Musk's request to block OpenAI for-profit conversion but welcomes trial

OAKLAND, Calif. (AP) -- A federal judge has denied Elon Musk's request for a court order blocking OpenAI from converting itself to a for-profit company but said she could expedite a trial to consider Musk's claims against the ChatGPT maker and its CEO. U.S. District Judge Yvonne Gonzalez Rogers ruled late Tuesday that "Musk has not demonstrated likelihood of success on the merits" in his request for a preliminary injunction. She offered to hold a trial in her California courtroom as soon as this fall, "given the public interest at stake and potential for harm if a conversion contrary to law occurred." Musk, an early OpenAI investor, began a legal offensive against the ChatGPT maker and CEO Sam Altman a year ago, suing for breach of contract over what he said was the betrayal of its founding aims as a nonprofit. He escalated the legal dispute late last year, adding new claims and defendants, including Microsoft, and asking for a court order that would stop OpenAI's plans to convert itself into a for-profit business. Musk also added his own AI company, xAI, as a plaintiff, claiming that OpenAI was unfairly stifling business competition. He and a group of investors more recently made an unsolicited $97.4 billion bid to buy a controlling stake in the nonprofit -- a move that undermined Musk's "claim of irreparable harm," the judge wrote. OpenAI said it welcomed the court's decision. "This has always been about competition," a statement from the company said. "Elon's own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for our mission or U.S. interests." Musk alleges in the lawsuit that the companies are violating the terms of his foundational contributions to the charity. He had invested about $45 million in the startup from its founding until 2018, his lawyer has said. Musk attorney Marc Toberoff said in a statement late Tuesday that he is pleased that the court offered an expedited trial on the core claims. "We look forward to a jury confirming that Altman accepted Musk's charitable contributions knowing full well they had to be used for the public's benefit rather than his own enrichment," Toberoff said. Gonzalez Rogers in a hearing last month called it a "stretch" to claim "irreparable harm" to Musk, and she called the case "billionaires vs. billionaires." She questioned why Musk invested tens of millions in OpenAI without a written contract. Toberoff responded that it was because the relationship between Altman and Musk at the time was "built on trust" and the two were very close. "That is just a lot of money" to invest "on a handshake," the judge said. The dispute has roots in a 2017 internal power struggle at the fledgling startup that led to Altman becoming OpenAI's CEO. Emails disclosed by OpenAI show Musk had also sought to be CEO and grew frustrated after two other OpenAI co-founders said he would hold too much power as a major shareholder and chief executive if the startup succeeded in its goal to achieve better-than-human AI known as artificial general intelligence. Musk has long voiced concerns about how advanced forms of AI could threaten humanity. Altman eventually succeeded in becoming CEO and has remained so except for a period in 2023 when he was fired and then reinstated days later after the board that ousted him was replaced. Gonzalez Rogers, appointed by then-President Barack Obama in 2011, has handled a number of tech industry cases including Apple's fight with Epic Games, though she said last month that Musk's case is "nothing like" that one. That case was also the last time she granted a preliminary injunction, eight months before the case went to trial. O'Brien reported from Providence, Rhode Island. The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP's text archives.

Musk fails in bid to block OpenAI becoming for-profit business

San Francisco (AFP) - A US judge on Tuesday denied Elon Musk's request to prevent OpenAI from becoming a for-profit business in a loss for the Tesla tycoon amid his feud with Sam Altman. US District Court Judge Yvonne Gonzalez Rogers ruled that Musk and his xAI startup failed to prove an injunction against OpenAI was necessary as the case heads to trial. Musk sued in California federal court to stop OpenAI from transitioning from a nonprofit to a for-profit business, arguing the startup violated antitrust law and betrayed his trust in their mission as a co-founder of OpenAI. The judge wrote that, while Musk did not prove the need for an injunction, she is prepared to expedite a trial on that claim later this year. The ruling leaves OpenAI free to continue its transition from nonprofit to for-profit enterprise. Musk's injunction bid argued that OpenAI's co-founders, including chief executive Altman, "took advantage of Musk's altruism in order to lure him into funding the venture," according to court documents. Musk contended in filings that it was clear his backing of OpenAI was contingent on it remaining a nonprofit, offering a few email exchanges to support the claim. "Whether Musk's emails and social media posts constitute a writing sufficient to constitute an actual contract or charitable trust between the parties is debatable," the judge said in her ruling. OpenAI's board chairman in February rejected a Musk-led offer to buy the valuable artificial intelligence company for $97.4 billion. "OpenAI is not for sale, and the board has unanimously rejected Mr. Musk's latest attempt to disrupt his competition," OpenAI Board Chair 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 with a money-making subsidiary. The change to a for-profit model -- one that Altman considers crucial for the company's development -- has exacerbated ongoing tensions with Musk. Musk and Altman were among the 11-person team that founded OpenAI in 2015, with the former providing initial funding of $45 million. Three years later, Musk departed the company, with OpenAI citing "a potential future conflict for Elon... as Tesla continues to become more focused on AI." Musk established his own artificial intelligence company, dubbed xAI, in early 2023 after OpenAI ignited global fervor over the technology. The massive cost of designing, training, and deploying AI models has compelled OpenAI to seek a new corporate structure that would give investors equity and provide more stable governance.

Musk fails in bid to block OpenAI becoming for-profit business

A U.S. judge on Tuesday denied Elon Musk's request to prevent OpenAI from becoming a for-profit business in a loss for the Tesla tycoon amid his feud with Sam Altman. U.S. District Court Judge Yvonne Gonzalez Rogers ruled that Musk and his xAI startup failed to prove an injunction against OpenAI was necessary as the case heads to trial. Musk sued in California federal court to stop OpenAI from transitioning from a nonprofit to a for-profit business, arguing the startup violated antitrust law and betrayed his trust in their mission as a co-founder of OpenAI. The judge wrote that, while Musk did not prove the need for an injunction, she is prepared to expedite a trial on that claim later this year. The ruling leaves OpenAI free to continue its transition from nonprofit to for-profit enterprise. Musk's injunction bid argued that OpenAI's co-founders, including chief executive Altman, "took advantage of Musk's altruism in order to lure him into funding the venture," according to court documents. Musk contended in filings that it was clear his backing of OpenAI was contingent on it remaining a nonprofit, offering a few email exchanges to support the claim. "Whether Musk's emails and social media posts constitute a writing sufficient to constitute an actual contract or charitable trust between the parties is debatable," the judge said in her ruling. OpenAI's board chairman in February rejected a Musk-led offer to buy the valuable artificial intelligence company for $97.4 billion. "OpenAI is not for sale, and the board has unanimously rejected Mr. Musk's latest attempt to disrupt his competition," OpenAI Board Chair 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 with a money-making subsidiary. The change to a for-profit model, one that Altman says is crucial for the company's development, has exacerbated ongoing tensions with Musk. Musk and Altman were among the 11-person team that founded OpenAI in 2015, with the former providing initial funding of $45 million. Three years later, Musk left the company, with OpenAI citing "a potential future conflict for Elon ... as Tesla continues to become more focused on AI." Musk established his own artificial intelligence company, dubbed xAI, in early 2023 after OpenAI ignited global fervor over the technology. The massive cost of designing, training, and deploying AI models has compelled OpenAI to seek a new corporate structure that would give investors equity and provide more stable governance.

Judge denies Elon Musk's request to block OpenAI for-profit conversion but welcomes trial

OAKLAND, Calif. (AP) -- A federal judge has denied Elon Musk's request for a court order blocking OpenAI from converting itself to a for-profit company but said she could expedite a trial to consider Musk's claims against the ChatGPT maker and its CEO. U.S. District Judge Yvonne Gonzalez Rogers ruled late Tuesday that "Musk has not demonstrated likelihood of success on the merits" in his request for a preliminary injunction. She offered to hold a trial in her California courtroom as soon as this fall, "given the public interest at stake and potential for harm if a conversion contrary to law occurred." Musk, an early OpenAI investor, began a legal offensive against the ChatGPT maker and CEO Sam Altman a year ago, suing for breach of contract over what he said was the betrayal of its founding aims as a nonprofit. He escalated the legal dispute late last year, adding new claims and defendants, including Microsoft, and asking for a court order that would stop OpenAI's plans to convert itself into a for-profit business. Musk also added his own AI company, xAI, as a plaintiff, claiming that OpenAI was unfairly stifling business competition. He and a group of investors more recently made an unsolicited $97.4 billion bid to buy a controlling stake in the nonprofit -- a move that undermined Musk's "claim of irreparable harm," the judge wrote. OpenAI said it welcomed the court's decision. "This has always been about competition," a statement from the company said. "Elon's own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for our mission or U.S. interests." Musk alleges in the lawsuit that the companies are violating the terms of his foundational contributions to the charity. He had invested about $45 million in the startup from its founding until 2018, his lawyer has said. Musk attorney Marc Toberoff said in a statement late Tuesday that he is pleased that the court offered an expedited trial on the core claims. "We look forward to a jury confirming that Altman accepted Musk's charitable contributions knowing full well they had to be used for the public's benefit rather than his own enrichment," Toberoff said. Gonzalez Rogers in a hearing last month called it a "stretch" to claim "irreparable harm" to Musk, and she called the case "billionaires vs. billionaires." She questioned why Musk invested tens of millions in OpenAI without a written contract. Toberoff responded that it was because the relationship between Altman and Musk at the time was "built on trust" and the two were very close. "That is just a lot of money" to invest "on a handshake," the judge said. The dispute has roots in a 2017 internal power struggle at the fledgling startup that led to Altman becoming OpenAI's CEO. Emails disclosed by OpenAI show Musk had also sought to be CEO and grew frustrated after two other OpenAI co-founders said he would hold too much power as a major shareholder and chief executive if the startup succeeded in its goal to achieve better-than-human AI known as artificial general intelligence. Musk has long voiced concerns about how advanced forms of AI could threaten humanity. Altman eventually succeeded in becoming CEO and has remained so except for a period in 2023 when he was fired and then reinstated days later after the board that ousted him was replaced. Gonzalez Rogers, appointed by then-President Barack Obama in 2011, has handled a number of tech industry cases including Apple's fight with Epic Games, though she said last month that Musk's case is "nothing like" that one. That case was also the last time she granted a preliminary injunction, eight months before the case went to trial. The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP's text archives.

Judge Denies Elon Musk's Request to Block OpenAI For-Profit Conversion but Welcomes Trial

OAKLAND, Calif. (AP) -- A federal judge has denied Elon Musk's request for a court order blocking OpenAI from converting itself to a for-profit company but said she could expedite a trial to consider Musk's claims against the ChatGPT maker and its CEO. U.S. District Judge Yvonne Gonzalez Rogers ruled late Tuesday that "Musk has not demonstrated likelihood of success on the merits" in his request for a preliminary injunction. She offered to hold a trial in her California courtroom as soon as this fall, "given the public interest at stake and potential for harm if a conversion contrary to law occurred." Musk, an early OpenAI investor, began a legal offensive against the ChatGPT maker and CEO Sam Altman a year ago, suing for breach of contract over what he said was the betrayal of its founding aims as a nonprofit. He escalated the legal dispute late last year, adding new claims and defendants, including Microsoft, and asking for a court order that would stop OpenAI's plans to convert itself into a for-profit business. Musk also added his own AI company, xAI, as a plaintiff, claiming that OpenAI was unfairly stifling business competition. He and a group of investors more recently made an unsolicited $97.4 billion bid to buy a controlling stake in the nonprofit -- a move that undermined Musk's "claim of irreparable harm," the judge wrote. OpenAI said it welcomed the court's decision. "This has always been about competition," a statement from the company said. "Elon's own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for our mission or U.S. interests." Musk alleges in the lawsuit that the companies are violating the terms of his foundational contributions to the charity. He had invested about $45 million in the startup from its founding until 2018, his lawyer has said. Musk attorney Marc Toberoff said in a statement late Tuesday that he is pleased that the court offered an expedited trial on the core claims. "We look forward to a jury confirming that Altman accepted Musk's charitable contributions knowing full well they had to be used for the public's benefit rather than his own enrichment," Toberoff said. Gonzalez Rogers in a hearing last month called it a "stretch" to claim "irreparable harm" to Musk, and she called the case "billionaires vs. billionaires." She questioned why Musk invested tens of millions in OpenAI without a written contract. Toberoff responded that it was because the relationship between Altman and Musk at the time was "built on trust" and the two were very close. "That is just a lot of money" to invest "on a handshake," the judge said. The dispute has roots in a 2017 internal power struggle at the fledgling startup that led to Altman becoming OpenAI's CEO. Emails disclosed by OpenAI show Musk had also sought to be CEO and grew frustrated after two other OpenAI co-founders said he would hold too much power as a major shareholder and chief executive if the startup succeeded in its goal to achieve better-than-human AI known as artificial general intelligence. Musk has long voiced concerns about how advanced forms of AI could threaten humanity. Altman eventually succeeded in becoming CEO and has remained so except for a period in 2023 when he was fired and then reinstated days later after the board that ousted him was replaced. Gonzalez Rogers, appointed by then-President Barack Obama in 2011, has handled a number of tech industry cases including Apple's fight with Epic Games, though she said last month that Musk's case is "nothing like" that one. That case was also the last time she granted a preliminary injunction, eight months before the case went to trial. The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP's text archives. Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Elon Musk loses bid to block OpenAI's transformation.

District Judge Yvonne Gonzalez Rogers has denied Musk's request for an injunction to pause the ChatGPT maker's transition to a for-profit company. The case is now set for an expedited trial this fall given "the public interest at stake." This comes after OpenAI unanimously rejected Musk's unsolicited $97.4 billion offer to buy the AI startup. In February Rogers said she was unlikely to issue an injunction in a case pitting "billionaires versus billionaires."

Elon Musk's court order against OpenAI gets blocked by federal judge

A federal judge has denied Elon Musk's request for a court order blocking OpenAI from converting itself to a for-profit company but said she could expedite a trial to consider Musk's claims against the ChatGPT maker and its CEO. U.S. District Judge Yvonne Gonzalez Rogers ruled late Tuesday that "Musk has not demonstrated likelihood of success on the merits" in his request for a preliminary injunction. She offered to hold a trial in her California courtroom as soon as this fall, "given the public interest at stake and potential for harm if a conversion contrary to law occurred." Musk, an early OpenAI investor, began a legal offensive against the ChatGPT maker and CEO Sam Altman a year ago, suing for breach of contract over what he said was the betrayal of its founding aims as a nonprofit. He escalated the legal dispute late last year, adding new claims and defendants, including Microsoft, and asking for a court order that would stop OpenAI's plans to convert itself into a for-profit business. Musk also added his own AI company, xAI, as a plaintiff, claiming that OpenAI was unfairly stifling business competition. He and a group of investors more recently made an unsolicited $97.4 billion bid to buy a controlling stake in the nonprofit -- a move that undermined Musk's "claim of irreparable harm," the judge wrote. OpenAI said it welcomed the court's decision. "This has always been about competition," a statement from the company said. "Elon's own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for our mission or U.S. interests." Musk alleges in the lawsuit that the companies are violating the terms of his foundational contributions to the charity. He had invested about $45 million in the startup from its founding until 2018, his lawyer has said. Musk attorney Marc Toberoff said in a statement late Tuesday that he is pleased that the court offered an expedited trial on the core claims. "We look forward to a jury confirming that Altman accepted Musk's charitable contributions knowing full well they had to be used for the public's benefit rather than his own enrichment," Toberoff said. Gonzalez Rogers in a hearing last month called it a "stretch" to claim "irreparable harm" to Musk, and she called the case "billionaires vs. billionaires." She questioned why Musk invested tens of millions in OpenAI without a written contract. Toberoff responded that it was because the relationship between Altman and Musk at the time was "built on trust" and the two were very close. "That is just a lot of money" to invest "on a handshake," the judge said. The dispute has roots in a 2017 internal power struggle at the fledgling startup that led to Altman becoming OpenAI's CEO. Emails disclosed by OpenAI show Musk had also sought to be CEO and grew frustrated after two other OpenAI cofounders said he would hold too much power as a major shareholder and chief executive if the startup succeeded in its goal to achieve better-than-human AI known as artificial general intelligence. Musk has long voiced concerns about how advanced forms of AI could threaten humanity. Altman eventually succeeded in becoming CEO and has remained so except for a period in 2023 when he was fired and then reinstated days later after the board that ousted him was replaced. Gonzalez Rogers, appointed by then-President Barack Obama in 2011, has handled a number of tech industry cases including Apple's fight with Epic Games, though she said last month that Musk's case is "nothing like" that one. That case was also the last time she granted a preliminary injunction, eight months before the case went to trial.

Judge denies Musk's request to block OpenAI's conversion to for-profit company | BreakingNews.ie

A federal judge in the US has denied Elon Musk's request for a court order blocking OpenAI from converting itself to a for-profit company. However, the judge said she could expedite a trial to consider Mr Musk's claims against the ChatGPT maker and its chief executive. US District Judge Yvonne Gonzalez Rogers ruled that Mr Musk "has not demonstrated likelihood of success on the merits" in his request for a preliminary injunction. She offered to hold a trial in her California courtroom as soon as this autumn, "given the public interest at stake and potential for harm if a conversion contrary to law occurred". Mr Musk, an early OpenAI investor, began a legal offensive against the ChatGPT maker and chief executive Sam Altman a year ago, suing for breach of contract over what he said was the betrayal of its founding aims as a non-profit. He escalated the legal dispute late last year, adding new claims and defendants, including Microsoft, and asking for a court order that would stop OpenAI's plans to convert itself into a for-profit business. Mr Musk also added his own AI company, xAI, as a plaintiff, claiming that OpenAI was unfairly stifling business competition. He and a group of investors more recently made an unsolicited 97.4 billion dollar bid to buy a controlling stake in the non-profit -- a move that undermined Mr Musk's "claim of irreparable harm", the judge wrote. OpenAI said it welcomed the court's decision. "This has always been about competition," a statement from the company said. "Elon's own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for our mission or US interests." Mr Musk alleges in the lawsuit that the companies are violating the terms of his foundational contributions to the charity. He had invested about 45 million dollars in the start-up from its founding until 2018, his lawyer has said. Musk lawyer Marc Toberoff said in a statement late Tuesday that he is pleased that the court offered an expedited trial on the core claims. "We look forward to a jury confirming that Altman accepted Musk's charitable contributions knowing full well they had to be used for the public's benefit rather than his own enrichment," Mr Toberoff said. The judge, in a hearing last month, called it a " stretch" to claim "irreparable harm" to Mr Musk, and she called the case "billionaires vs. billionaires". She questioned why Mr Musk invested tens of millions in OpenAI without a written contract. Mr Toberoff responded that it was because the relationship between Mr Altman and Mr Musk at the time was "built on trust" and the two were very close. "That is just a lot of money" to invest "on a handshake", the judge said. The dispute has roots in a 2017 internal power struggle at the fledgling start-up that led to Mr Altman becoming OpenAI's chief executive. Emails disclosed by OpenAI show Mr Musk had also sought to be chief executive and grew frustrated after two other OpenAI co-founders said he would hold too much power as a major shareholder and chief executive if the start-up succeeded in its goal to achieve better-than-human AI known as artificial general intelligence. Mr Musk has long voiced concerns about how advanced forms of AI could threaten humanity. Mr Altman eventually succeeded in becoming chief executive and has remained so except for a period in 2023 when he was fired and then reinstated days later after the board that ousted him was replaced.

Judge denies Musk request to block OpenAI conversion to for-profit company

A federal judge on Tuesday rejected Elon Musk's request to block OpenAI from becoming a for-profit company, finding the tech billionaire failed to show he was likely to succeed on the merits of the case. However, U.S. District Judge Yvonne Gonzalez Rogers said she is prepared to expedite the trial in the case to the fall of 2025 "given the public interest at stake and potential for harm if a conversion contrary to law occurred." Musk, who helped found OpenAI, sued the artificial intelligence (AI) company, CEO Sam Altman and co-founder Greg Brockman last August, arguing they convinced him to invest in the project based on the premise that they shared his concerns about AI development. As OpenAI now prepares to convert into a for-profit entity, Musk alleges that Altman and Brockman have discarded the company's founding mission. The judge appeared open to Musk's argument that OpenAI's for-profit push represents a breach of contract but said it was a "toss-up" whether he would succeed in proving such a contract exists. "Whether Musk's emails and social media posts constitute a writing sufficient to constitute an actual contract or charitable trust between the parties is debatable," Rogers wrote in Tuesday's ruling. She noted that early communications show Altman and Brockman reassuring Musk about their altruistic motives. However, other messages show Musk also contemplating the possibility of converting OpenAI into a for-profit entity. "The Court agrees that significant and irreparable harm is incurred when the public's money is used to fund a non-profit's conversion into a for-profit," the judge said, referring to non-profit tax deductions. Rogers was more skeptical of Musk's other claims. The Tesla and SpaceX CEO expanded his lawsuit in November to accuse OpenAI of violating antitrust laws by colluding with Microsoft to box out other AI companies. His own AI firm, xAI, was added to the suit. The judge said she would consider expediting the trial solely on the contract claim and would require all other claims be dropped. The ruling comes just weeks after Musk made an unsolicited $97.4 billion bid to buy OpenAI, an effort he promised to drop if the AI company agreed to halt its for-profit transition. OpenAI's board of directors ultimately rejected Musk's bid, arguing in favor of the restructuring. "OpenAI is not for sale, and the board has unanimously rejected Mr. Musk's latest attempt to disrupt his competition," OpenAI Chair Bret Taylor said at the time. "Any potential reorganization of OpenAI will strengthen our nonprofit and its mission to ensure AGI [artificial general intelligence] benefits all of humanity."

Judge denies Musk's initial bid to halt OpenAI's for-profit shift but sets trial for fall

The judge rejected Musk's request for a preliminary injunction but fast-tracked the dispute for a trial A US judge on Tuesday denied Elon Musk's request for a preliminary injunction to pause OpenAI's transition to a for-profit model but agreed to hear a trial in the fall of this year, the latest turn in the high-stakes legal fight. The tech billionaire does not have "the high burden required for a preliminary injunction" to block the conversion of OpenAI, said Yvonne Gonzalez Rogers, a US district judge in Oakland, California. But Rogers wrote in the order that she wanted to resolve the lawsuit quickly given "the public interest at stake and potential for harm if a conversion contrary to law occurred". Musk and OpenAI, which he co-founded as a non-profit in 2015 but left before it took off, have been embroiled in a yearlong legal battle. The CEO of Tesla and X, formerly Twitter, accuses OpenAI of straying from its founding mission to develop artificial intelligence for the good of humanity, not corporate profit. OpenAI and its CEO, Sam Altman, have denied the allegations. At stake in the lawsuit is the ChatGPT maker's transition to a for-profit model, which Altman has said is crucial to raising more capital and competing well in the expensive AI race. OpenAI welcomed the judge's decision on Tuesday, saying the lawsuit by Musk, who launched the rival startup xAI in 2023, has "always been about competition". OpenAI's main backer, Microsoft, did not respond to a request for comment. Marc Toberoff, a lawyer for Musk, said they were pleased the judge "offered an expedited trial on the core claims driving this case". "We look forward to a jury confirming that Altman accepted Musk's charitable contributions knowing full well they had to be used for the public's benefit rather than his own enrichment," Toberoff said. The ruling comes weeks after Altman rejected a $97.4bn unsolicited takeover bid from a Musk-led consortium with a "no thank you". Altman, who has said OpenAI is not for sale, alleges that Musk has been trying to slow down a competitor. SoftBank Group is in talks to lead a funding round of up to $40bn in OpenAI at a valuation of $300bn. That would dwarf the $75bn valuation xAI has discussed in a recent fundraise.

Musk loses bid to stop OpenAI's for-profit shift, but can make his case in trial

A federal judge rejected Elon Musk's request to block OpenAI's planned conversion from a nonprofit to for-profit entity but expedited the case so that Musk's core claims can be addressed in a trial before the end of this year. Musk had filed a motion for preliminary injunction in US District Court for the Northern District of California, claiming that OpenAI's for-profit conversation "violates the terms of Musk's donations" to the company. But Musk failed to meet the burden of proof needed for an injunction, Judge Yvonne Gonzalez Rogers ruled yesterday. "Plaintiffs Elon Musk, [former OpenAI board member] Shivon Zilis, and X.AI Corp. ('xAI') collectively move for a preliminary injunction barring defendants from engaging in various business activities, which plaintiffs claim violate federal antitrust and state law," Rogers wrote. "The relief requested is extraordinary and rarely granted as it seeks the ultimate relief of the case on an expedited basis, with a cursory record, and without the benefit of a trial." Rogers said that "the Court is prepared to offer an expedited schedule on the core claims driving this litigation [to] address the issues which are allegedly more urgent in terms of public, not private, considerations." There would be important public interest considerations if the for-profit shift is found to be illegal at a trial, she wrote. Musk said OpenAI took advantage of him Noting that OpenAI donors may have taken tax deductions from a nonprofit that is now turning into a for-profit enterprise, Rogers said the court "agrees that significant and irreparable harm is incurred when the public's money is used to fund a non-profit's conversion into a for-profit." But as for the motion to block the for-profit conversion before a trial, "The request for an injunction barring any steps towards OpenAI's conversion to a for-profit entity is DENIED." In a summary of Musk's complaint, Rogers said it is alleged that OpenAI CEO Sam Altman "took advantage of Musk's altruism in order to lure him into funding the venture" but was only "pretending to share Musk's concern about the trajectory of the artificial intelligence industry." Musk says he gave $44 million to OpenAI from 2016 to 2020. Altman and co-founder Gregory Brockman allegedly "solicited millions in donations from Musk to build OpenAI on the promise that the organization would put people over profit and serve as a counterweight to the other dominant players in the AI space. With full knowledge that Musk's money was contingent upon using his money charitably, defendants set about building a for-profit behemoth contrary to their original promises." Musk cited emails but no formal contract Musk supported his claim with emails from 2015 to 2017 that he says show "an intent to make the donation contingent on OpenAI remaining a non-profit," Rogers wrote. He also cited his own social media posts "from 2023 and 2024 expressing anger at OpenAI's betrayal of its original non-profit motivations." But there was no formal contract submitted as evidence. "Other than these emails, no contract or gifting document with terms and conditions exists," Rogers wrote. "On this basis, defendants dispute the allegations. Whether Musk's emails and social media posts constitute a writing sufficient to constitute an actual contract or charitable trust between the parties is debatable." Rogers granted that the emails are "highly suggestive" for Musk's case but said they aren't enough on their own to demonstrate a likelihood of success at trial. "There is, for example, defendants' counter-evidence implying that Musk himself considered the possibility of being the one to turn OpenAI into a for-profit," she wrote. "On balance, the Court finds the emails are insufficient for purposes of the high burden required for a preliminary injunction and the question of likelihood of success on the merits to be a toss-up." Rogers found that because "the threshold question of whether a charitable trust was created remains a toss-up, Musk has not demonstrated likelihood of success on the merits sufficient to obtain an injunction." Trial expedited to fall 2025 Musk's lawsuit also names OpenAI investor and partner Microsoft as a defendant and alleges that the companies violated antitrust law "based on the alleged issuance of a so-called 'fund no competitors' edict issued by OpenAI and Microsoft allegedly commanding OpenAI investors to avoid investing in any competitor." But Rogers' ruling said the lawsuit "has not actually alleged, or provided evidence of, an actual agreement between Microsoft and OpenAI to collude. That Microsoft is a major investor in OpenAI does not, by itself, support such a finding." Musk further complained about "interlocking directorates on the Microsoft and OpenAI boards" and sought an order "barring either corporation from benefiting from improper information sharing." The overall case could drag on for years, but Rogers said the question of OpenAI's for-profit conversion can be addressed in 2025. "[G]iven the public interest at stake and potential for harm if a conversion contrary to law occurred, the Court is prepared to expedite trial to the fall of 2025 solely on that claim and potentially the interrelated contract-based claims," she wrote. "However, the Court would require all ancillary claims to be stayed. As discussed at the hearing, it is unlikely the full case will be ready for trial until 2027 or 2028." Musk and a consortium of investors recently made a $97.4 billion offer to buy OpenAI last week. OpenAI was founded as a nonprofit in 2015 and created an additional "capped profit" entity in 2019. That would change with OpenAI's planned shift to a for-profit public benefit corporation, but a nonprofit arm would continue to exist. OpenAI has reportedly considered granting special voting powers to its nonprofit board so that it would retain control over the restructured company. Separately, UK authorities today dropped an investigation into whether the Microsoft/OpenAI partnership violates competition law.

Judge rejects Elon Musk bid to block OpenAI's for-profit plan -- but...

Elon Musk has lost his bid to block Sam Altman from transforming OpenAI into a for-profit entity - but a federal judge signaled Tuesday that she could expedite a trial to consider other elements of his antitrust case against the ChatGPT creator. US District Judge Yvonne Gonzalez Rogers said Musk and his fellow plaintiffs had "failed to meet their burden of proof for the extraordinary relief requested" after claiming they faced irreparable harm if OpenAI was allowed to complete a planned restructuring. "Given the public interest at stake and potential for harm if a conversion contrary to law occurred, the Court is prepared to expedite trial to the fall of 2025," Rogers wrote in her decision. Filed last year, Musk's lawsuit named OpenAI, Altman, investor Microsoft, billionaire Reid Hoffman and others as co-defendants. His suit alleges that OpenAI violated antitrust law and abandoned its original goal of developing AI to benefit humanity while transforming from a "tax-exempt charity to a $157 billion for-profit, market-paralyzing gorgon." During a hearing last month, the judge said Musk's claims of irreparable harm were a "stretch" but expressed openness to a trial, so long as the billionaire took the stand to testify. "We look forward to a jury confirming that Altman accepted Musk's charitable contributions knowing full well they had to be used for the public's benefit rather than his own enrichment," Musk attorney Marc Toberoff said in a statement on the judge's ruling. Musk co-founded OpenAI alongside Altman in 2015 and served as its key early investor, pouring about $45 million into the startup over a three-year span. He later exited the firm after disagreements about its long-term direction. Musk has since founded an artificial intelligence startup, xAI, that directly competes with OpenAI. The public tussle between the two billionaires escalated last month after Musk made an unsolicited $97.4 billion to take control of OpenAI. The offer was quickly rejected by Altman, who repeated his accusation that Musk was simply trying to slow down his key rival. The judge said that Musk's offer "undermined" his claim of irreparable harm. "This has always been about competition," OpenAI said in a statement on the judge's decision. "Elon's own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for our mission or U.S. interests." The spat between Musk and Altman has turned personal in recent months as the two billionaires trade barbs in the media. Altman recently told Bloomberg that Musk's "whole life is from a position from insecurity" and that he doesn't think Musk is a "happy person." "He obviously is a competitor," Altman added. "I wish he would just compete by building a better product, but I think there's been a lot of tactics, many, many lawsuits, all sorts of other crazy stuff, now this."

Musk fails in bid to block OpenAI becoming for-profit

SAN FRANCISCO (AFP) - A United States (US) judge denied Elon Musk's request to prevent OpenAI from becoming a for-profit business in a loss for the Tesla tycoon amid his feud with Sam Altman. US District Court Judge Yvonne Gonzalez Rogers ruled that Musk and his xAI startup failed to prove an injunction against OpenAI was necessary as the case heads to trial. Musk sued in California federal court to stop OpenAI from transitioning from a nonprofit to a for-profit business, arguing the startup violated antitrust law and betrayed his trust in their mission as a co-founder of OpenAI. The judge wrote that, while Musk did not prove the need for an injunction, she is prepared to expedite a trial on that claim later this year. The ruling leaves OpenAI free to continue its transition from nonprofit to for-profit enterprise. Musk's injunction bid argued that OpenAI's co-founders, including chief executive Altman, "took advantage of Musk's altruism in order to lure him into funding the venture", according to court documents. Musk contended in filings that it was clear his backing of OpenAI was contingent on it remaining a nonprofit, offering a few email exchanges to support the claim. "Whether Musk's emails and social media posts constitute a writing sufficient to constitute an actual contract or charitable trust between the parties is debatable," the judge said in her ruling. OpenAI's board chairman in February rejected a Musk-led offer to buy the valuable artificial intelligence company for USD97.4 billion. "OpenAI is not for sale, and the board has unanimously rejected Musk's latest attempt to disrupt his competition," OpenAI Board Chair Bret Taylor said in a statement posted by the company on Musk-owned X, formerly Twitter.

Musk may still have a chance to thwart OpenAI's for-profit conversion | TechCrunch

Elon Musk lost the latest battle in his lawsuit against OpenAI this week, but a federal judge appears to have given Musk -- and others who oppose OpenAI's for-profit conversion -- reasons to be hopeful. Musk's suit against OpenAI, which also names Microsoft and OpenAI CEO Sam Altman as defendants, accuses OpenAI of abandoning its nonprofit mission to ensure its AI research benefits all humanity. OpenAI was founded as a nonprofit in 2015 but converted to a "capped-profit" structure in 2019, and now seeks to restructure once more into a public benefit corporation. Musk had sought a preliminary injunction to halt OpenAI's transition to a for-profit. On Tuesday, a federal judge in Northern California, U.S. District Court Judge Yvonne Gonzalez Rogers, denied Musk's request -- yet expressed some jurisprudential concerns about OpenAI's planned conversion. Judge Rogers said in her ruling denying the injunction that "significant and irreparable harm is incurred" when the public's money is used to fund a nonprofit's conversion into a for-profit. OpenAI's nonprofit currently has a majority stake in OpenAI's for-profit operations, and it reportedly stands to receive billions of dollars in compensation as a part of the transition. Judge Rogers also noted that several of OpenAI's co-founders, including Altman and president Greg Brockman, made "foundational commitments" not to use OpenAI "as a vehicle to enrich themselves." In her ruling, Judge Rogers said that the Court is prepared to offer an expedited trial in the fall of 2025 to resolve the corporate restructuring disputes. Marc Toberoff, a lawyer representing Musk, told TechCrunch that Musk's legal team is pleased with the judge's decision and intends to accept the offer for an expedited trial. OpenAI hasn't said whether it'll also accept and did not immediately respond to TechCrunch's request for comment. Judge Rogers' comments on OpenAI's for-profit conversion aren't exactly good news for the company. Tyler Whitmer, a lawyer representing Encode, a nonprofit that filed an amicus brief in the case arguing that OpenAI's for-profit conversion could jeopardize AI safety, told TechCrunch that Judge Rogers' decision puts a "cloud" of regulatory uncertainty over OpenAI's board of directors. Attorneys general in California and Delaware are already investigating the transition, and the concerns Judge Rogers raised could embolden them to probe more aggressively, Whitmer said. There were some wins for OpenAI in Judge Rogers' ruling. The evidence Musk's legal team presented to show that OpenAI breached a contract in accepting around $44 million in donations from Musk, then taking steps to convert to a for-profit, was "insufficient for purposes of the high burden required for a preliminary injunction," Judge Rogers found. In her ruling, the judge pointed out that some emails submitted as exhibits showed Musk himself considering that OpenAI might become a for-profit company someday. Judge Rogers also said that Musk's AI company, xAI, a plaintiff in the case, failed to demonstrate that it would suffer "irreparable harm" should OpenAI's for-profit conversion not be enjoined. Judge Rogers was also unpersuaded by the plaintiffs' arguments that OpenAI's close collaborator and investor, Microsoft, would violate interlocking directorate laws and that Musk has standing under a California provision prohibiting self-dealing. Musk, once a key supporter of OpenAI, has positioned himself as one of the company's greatest adversaries. xAI competes directly with OpenAI in developing frontier AI models, and Musk and Altman now find themselves jockeying for legal and political power under a new presidential administration. The stakes are high for OpenAI. The company reportedly needs to complete its for-profit conversion by 2026, or some of the capital OpenAI recently raised could convert to debt. At least one former OpenAI employee is fearful of the implications for AI governance should OpenAI successfully complete its transition. Speaking to TechCrunch on the condition of anonymity to protect their future job prospects, the ex-employee said they believe the startup's conversion could threaten public safety. Part of the motivation behind OpenAI's nonprofit structure was to ensure that profit motives don't override its mission: ensuring AI research benefits all of humanity. However, if OpenAI becomes a traditional for-profit company, there may be little to stop it from prioritizing profit above all else, the former employee told TechCrunch. The ex-employee added that OpenAI's nonprofit structure was one of the main reasons they joined the organization. Just a few months from now, it should become clearer how many hurdles OpenAI will have to overcome in its for-profit transition. Regulators, AI safety advocates, and tech investors will be watching with great interest.

Judge Denies Musk's Bid to Halt OpenAI's For-Profit Shift, Fast Tracks Trial

He says OpenAI aimed to develop AI for the good or humanity, not profits A US judge on Tuesday denied billionaire Elon Musk's request for a preliminary injunction to pause OpenAI's transition to a for-profit model but agreed to a fast-track trial in the fall of this year, the latest turn in the high-stakes legal fight. Musk does not have "the high burden required for a preliminary injunction" to block the conversion of OpenAI, said US District Judge Yvonne Gonzalez Rogers in Oakland, California. But Rogers wrote in the order that she wanted to resolve the lawsuit quickly given "the public interest at stake and potential for harm if a conversion contrary to law occurred." Musk and OpenAI, which he co-founded as a nonprofit in 2015 but left before it took off, have been embroiled in a yearlong legal battle. The CEO of Tesla and X social media accuses OpenAI of straying from its founding mission -- to develop artificial intelligence for the good of humanity, not corporate profit. OpenAI and its CEO Sam Altman have denied the allegations. At stake in the lawsuit is the ChatGPT maker's transition to a for-profit model, which the startup sees as crucial to raising more capital and competing well in the expensive AI race. OpenAI welcomed the judge's decision on Tuesday, saying the lawsuit by Musk, who launched rival startup xAI in 2023, has "always been about competition". OpenAI's main backer, Microsoft, did not respond to a request for comment. Marc Toberoff, a lawyer for Musk, said they were pleased the judge "offered an expedited trial on the core claims driving this case". "We look forward to a jury confirming that Altman accepted Musk's charitable contributions knowing full well they had to be used for the public's benefit rather than his own enrichment," Toberoff said. The ruling comes weeks after Altman rejected a $97.4 billion (roughly Rs. 8,47,793 crore) unsolicited takeover bid from a Musk-led consortium with a "no thank you." Altman, who has said OpenAI is not for sale, alleges that Musk has been trying to slow down a competitor. SoftBank Group is in talks to lead a funding round of up to $40 billion (roughly Rs. 3,48,170 crore) in OpenAI at a valuation of $300 billion (roughly Rs. 26,11,213 crore), Reuters reported in January. That would dwarf the $75 billion (roughly Rs. 6,52,803 crore) valuation xAI has discussed in a recent fundraise, according to reports. © Thomson Reuters 2025

Judge denies Musk's request to block OpenAI for-profit conversion but welcomes trial

OAKLAND, Calif. -- A federal judge has denied Elon Musk's request for a court order blocking OpenAI from converting itself to a for-profit company but said she could expedite a trial to consider Musk's claims against the ChatGPT maker and its CEO. U.S. District Judge Yvonne Gonzalez Rogers ruled late Tuesday that "Musk has not demonstrated likelihood of success on the merits" in his request for a preliminary injunction. She offered to hold a trial in her California courtroom as soon as this fall, "given the public interest at stake and potential for harm if a conversion contrary to law occurred." Musk, an early OpenAI investor, began a legal offensive against the ChatGPT maker and CEO Sam Altman a year ago, suing for breach of contract over what he said was the betrayal of its founding aims as a nonprofit. He escalated the legal dispute late last year, adding new claims and defendants, including Microsoft, and asking for a court order that would stop OpenAI's plans to convert itself into a for-profit business. Musk also added his own AI company, xAI, as a plaintiff, claiming that OpenAI was unfairly stifling business competition. He and a group of investors more recently made an unsolicited $97.4 billion bid to buy a controlling stake in the nonprofit -- a move that undermined Musk's "claim of irreparable harm," the judge wrote. OpenAI said it welcomed the court's decision. "This has always been about competition," a statement from the company said. "Elon's own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for our mission or U.S. interests." Musk alleges in the lawsuit that the companies are violating the terms of his foundational contributions to the charity. He had invested about $45 million in the startup from its founding until 2018, his lawyer has said. Musk attorney Marc Toberoff said in a statement late Tuesday that he is pleased that the court offered an expedited trial on the core claims. "We look forward to a jury confirming that Altman accepted Musk's charitable contributions knowing full well they had to be used for the public's benefit rather than his own enrichment," Toberoff said. Gonzalez Rogers in a hearing last month called it a "stretch" to claim "irreparable harm" to Musk, and she called the case "billionaires vs. billionaires." She questioned why Musk invested tens of millions in OpenAI without a written contract. Toberoff responded that it was because the relationship between Altman and Musk at the time was "built on trust" and the two were very close. "That is just a lot of money" to invest "on a handshake," the judge said. The dispute has roots in a 2017 internal power struggle at the fledgling startup that led to Altman becoming OpenAI's CEO. Emails disclosed by OpenAI show Musk had also sought to be CEO and grew frustrated after two other OpenAI co-founders said he would hold too much power as a major shareholder and chief executive if the startup succeeded in its goal to achieve better-than-human AI known as artificial general intelligence. Musk has long voiced concerns about how advanced forms of AI could threaten humanity. Altman eventually succeeded in becoming CEO and has remained so except for a period in 2023 when he was fired and then reinstated days later after the board that ousted him was replaced. Gonzalez Rogers, appointed by then-President Barack Obama in 2011, has handled a number of tech industry cases including Apple's fight with Epic Games, though she said last month that Musk's case is "nothing like" that one. That case was also the last time she granted a preliminary injunction, eight months before the case went to trial. The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP's text archives.

Musk's attempt to block OpenAI's for-profit transformation denied

Elon Musk at the 2025 Conservative Political Action Conference. Image: Gage Skidmore via Flickr (CC by 2.0) The judge however said that the case would 'benefit from an expedited trial'. A federal judge has denied Elon Musk's motion to stop OpenAI's transformation into a for-profit entity, according to a fresh filing at the Northern District Court of California yesterday (4 March). Ruling over the case, District Judge Yvonne Gonzalez Rogers found that the DOGE leader failed to prove that OpenAI violated its founding values by shifting to a for-profit structure. However, she said that the case would "benefit from an expedited trial", which allegedly concerns public, and not private issues. It has been scheduled for later this year. In the now denied motion with four separate requests for injunction, Musk's lawyers claimed that OpenAI solicited donations from Musk, worth more than $44m, while agreeing to commit to keeping OpenAI a non-profit "for the good of the world". However, his lawyers were only able to supply email conversations between Musk and other OpenAI co-founders, including Sam Altman, and the court noted that no actual contract with such terms and conditions exists. Moreover, Musk also alleged that OpenAI and its biggest investor Microsoft violated the US Sherman Act by commanding OpenAI investors to avoid investing in any competitors. Yet again, the court found that Musk did not provide sufficient evidence to prove this claim, nor was he able to prove that Microsoft colluded with OpenAI for the same. Musk filed his lawsuit against OpenAI and its CEO Altman in March 2024 for not sticking to the company's original objective of developing AI for the benefit of humanity, later naming Microsoft as a defendant in the case a few months later. In September that year, reports emerged that OpenAI would be restructuring its business from a non-profit into a for-profit corporation. It was also reported that Altman would be receiving equity from the business, set to be valued at close to $150bn after the restructuring. Although, a spokesperson for the company told Reuters that the non-profit is "core" to OpenAI's mission and would continue to exist. Earlier last month, Musk made an unsolicited bid to purchase the non-profit that controls OpenAI for almost $100bn. In response to the offer, Altman said, "no thank you," in a post on X, while offering to "buy Twitter for $9.74bn" instead. Days later, a lawyer for Musk said that he will withdraw the offer if OpenAI's board of directors agree to stop the planned conversion to a for-profit company. However, the recent failed motion for injunction seemingly takes some of the edge away from Musk's bid to purchase the organisation. Elon Musk at the 2025 Conservative Political Action Conference. Image: Gage Skidmore via Flickr (CC by 2.0)

Judge Denies Musk's Request to Block OpenAI's For-Profit Plan

Sign up for the On Tech newsletter. Get our best tech reporting from the week. Get it sent to your inbox. In November, Elon Musk asked a federal court to block OpenAI's plan to transform itself from a nonprofit into a purely for-profit company. On Tuesday, a federal judge in San Francisco denied Mr. Musk's request, calling it "extraordinary." But the court allowed Mr. Musk to proceed with other aspects of a lawsuit he filed last year against OpenAI and its chief executive, Sam Altman. Mr. Musk helped create OpenAI as a nonprofit in 2015, along with Mr. Altman and others. In 2018, Mr. Musk left the organization after a battle for control of the company. Mr. Altman then attached OpenAI to a for-profit company so he could raise the billions of dollars needed to build artificial intelligence technologies. But the nonprofit retained control of the company. Last year, Mr. Altman and his company began working on a plan to shift control of the company from the nonprofit to OpenAI's investors as a for-profit company. Soon after, Mr. Musk filed a lawsuit against OpenAI and Mr. Altman, claiming they had breached the company's founding contract by putting commercial interests ahead of the public good. Later, Mr. Musk expanded the complaint to include claims that OpenAI had violated antitrust laws by asking investors to agree not to invest in rival companies, including Mr. Musk's new artificial intelligence company, xAI. "We welcome the court's decision," Lindsey Held, an OpenAI spokeswoman, said in a statement. "Elon's own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for our mission or U.S. interests." Earlier this year, Mr. Musk and a consortium of investors escalated his longstanding feud with Mr. Altman by offering to buy the assets of the nonprofit that controls OpenAI for more than $97 billion. OpenAI's board of directors later rejected the bid. But the bid could still complicate Mr. Altman's efforts to separate the company from the nonprofit board and raise the billions of dollars that OpenAI needs to build new technologies. "We're pleased the court has offered an expedited trial on the core claims driving this case, which in its words present 'urgent' issues in the public's interest," Marc Toberoff, the lawyer representing Mr. Musk, said in a statement to The New York Times. (The New York Times has sued OpenAI and its partner, Microsoft, accusing them of copyright infringement regarding news content related to A.I. systems. OpenAI and Microsoft have denied those claims.)

Musk fails in bid to block OpenAI becoming for-profit business

A US judge on Tuesday denied Elon Musk's request to prevent OpenAI from becoming a for-profit business in a loss for the Tesla tycoon amid his feud with Sam Altman. US District Court Judge Yvonne Gonzalez Rogers ruled that Musk and his xAI startup failed to prove an injunction against OpenAI was necessary as the case heads to trial. Musk sued in California federal court to stop OpenAI from transitioning from a nonprofit to a for-profit business, arguing the startup violated antitrust law and betrayed his trust in their mission as a co-founder of OpenAI. The judge wrote that, while Musk did not prove the need for an injunction, she is prepared to expedite a trial on that claim later this year. The ruling leaves OpenAI free to continue its transition from nonprofit to for-profit enterprise. Musk's injunction bid argued that OpenAI's co-founders, including chief executive Altman, "took advantage of Musk's altruism in order to lure him into funding the venture," according to court documents. Musk contended in filings that it was clear his backing of OpenAI was contingent on it remaining a nonprofit, offering a few email exchanges to support the claim. "Whether Musk's emails and social media posts constitute a writing sufficient to constitute an actual contract or charitable trust between the parties is debatable," the judge said in her ruling. OpenAI's board chairman in February rejected a Musk-led offer to buy the valuable artificial intelligence company for $97.4 billion. "OpenAI is not for sale, and the board has unanimously rejected Mr. Musk's latest attempt to disrupt his competition," OpenAI Board Chair 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 with a money-making subsidiary. The change to a for-profit model -- one that Altman considers crucial for the company's development -- has exacerbated ongoing tensions with Musk. Musk and Altman were among the 11-person team that founded OpenAI in 2015, with the former providing initial funding of $45 million. Three years later, Musk departed the company, with OpenAI citing "a potential future conflict for Elon... as Tesla continues to become more focused on AI." Musk established his own artificial intelligence company, dubbed xAI, in early 2023 after OpenAI ignited global fervor over the technology. The massive cost of designing, training, and deploying AI models has compelled OpenAI to seek a new corporate structure that would give investors equity and provide more stable governance.

OpenAI wins this round! Judge rejects Musk's bid to stop profit shift

According to Bloomberg, a US federal judge dismissed Elon Musk's attempt to block OpenAI's transition to a for-profit entity, stating that the plaintiffs "failed to meet their burden of proof for the extraordinary relief requested." However, other aspects of Musk's ongoing legal battle against the company can still move forward, as outlined in the court filing. OpenAI was established as a nonprofit AI research lab in 2015 and has recently begun commercializing its products, most notably the popular ChatGPT chatbot. Despite being overseen by a nonprofit organization, OpenAI has encountered significant challenges in its efforts to restructure into a for-profit organization, primarily due to Musk's opposition. In November 2024, Musk, along with his startup xAI and former OpenAI board member Shivon Zilis, sought a preliminary injunction against OpenAI's for-profit initiatives. This legal action marked an escalation in the feud that began when Musk filed a lawsuit against OpenAI in March 2024, alleging breach of contract and fiduciary duty. Following the initial lawsuit, the case was moved from state court to federal court. Musk expanded his complaint to include antitrust allegations against both Microsoft and OpenAI, claiming that OpenAI sought to restrict investors from supporting rival companies, including xAI. In public statements on X, Musk characterized OpenAI's for-profit transition as a "total scam" and referred to the organization as "evil." In response, OpenAI alleged in December 2024 that Musk had previously proposed creating a for-profit structure in 2017. OpenAI announced plans to establish a public benefit corporation to oversee its commercial operations, removing some restrictions associated with its nonprofit status by 2025. The company's board commented on the transition, stating, "The hundreds of billions of dollars that major companies are now investing into AI development show what it will really take for OpenAI to continue pursuing the mission." In a recent development, a Musk-led investor group offered $97.4 billion to acquire control of the nonprofit that oversees OpenAI. Musk's attorney, Marc Toberoff, emphasized that it is "time for OpenAI to return to the open-source, safety-focused force for good it once was." However, OpenAI CEO Sam Altman dismissed the offer as an attempt by Musk to "slow down a competitor." Following the court's dismissal of Musk's injunction, he indicated that he would withdraw his efforts if OpenAI halts its transition into a profit-driven organization. Judge Yvonne Gonzalez Rogers of the Northern District of California dismissed Musk's claims that OpenAI had violated antitrust laws and breached commitments to early donors, including Musk. Gonzalez Rogers ruled that Musk's arguments failed to provide sufficient proof. Nevertheless, she expedited a trial to the autumn of 2025 to address Musk's assertion that OpenAI's conversion is unlawful, stating that this is necessary due to "the public interest at stake and potential for harm if a conversion contrary to law occurred." Musk's legal actions against OpenAI are part of a broader rivalry in the AI sector that involves Musk's efforts to establish dominance through his own company, xAI, which was founded in 2023. Musk has accused Altman of betrayal and deceit, while Altman has suggested that Musk is not a "happy person." According to Altman, when questioned about claims of anti-competitive behavior, he stated that he did not instruct investors that supporting OpenAI meant they could not pursue investments in competitors. Instead, he explained that specific investors allowed access to OpenAI's confidential information understood they would lose that access if they made active investments in rival companies. Musk's allegations also include accusations that Altman and co-founder Greg Brockman exploited his initial philanthropic interests to secure funding for the company, while Gonzalez Rogers rejected claims that they breached any contracts by pursuing a for-profit structure. Neither OpenAI nor Musk's legal team responded to requests for comment regarding the ruling.

Court denies Elon Musk's attempt to block OpenAI's for-profit transformation

But it is fast-tracking his lawsuit against OpenAI and Microsoft. US federal judge Yvonne Gonzalez Rogers has denied Elon Musk's request for an injunction that would have immediately stopped OpenAI's conversion into a for-profit entity. Musk filed for an injunction late last year after suing OpenAI and Microsoft and accusing them of telling investors not to fund rival AI companies, such as his own xAI. According to the Financial Times, the judge dismissed his request based on that claim of anticompetitive behavior. Gonzalez Rogers cited a previous statement by OpenAI CEO Sam Altman, saying that the company only warned certain investors who were granted access to sensitive information that their rights would be terminated if they made a non-passive investment in rival companies. The judge also reportedly rejected the request based on Musk's claim that OpenAI and Altman broke their contract with him and violated the company's founding mission of building AI "for the benefit of humanity." Musk, who helped found OpenAI and funded it when it was just starting out, said Altman and his fellow OpenAI co-founder Greg Brockman "took advantage of [his] altruism in order to lure him into funding the venture." In a statement sent to Bloomberg, OpenAI said that the lawsuit has "always been about the competition." The company added that "Elon's own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for [OpenAI's] mission or US interests." After Musk filed his original lawsuit against OpenAI last year, the company published old emails between Musk and other people in the company. OpenAI revealed that Musk was not only aware that it was taking the for-profit route, he wanted majority equity, control of the initial board of directors and the CEO position. Anoter email from Musk suggested making the organization a part of Tesla. In February this year, Musk launched a bid to buy OpenAI for $97.4 billion, but the company gave him a firm "no thank you" in response. As Bloomberg noted, the judge's rejection of Musk's request is significant, because OpenAI is already in the process of talking with government officials about taking on a more typical corporate structure. While the judge has rejected Musk's request, she is fast-tracking his lawsuit and will hold an expedited trial later this year on the basis of public interest and on his claim that OpenAI's transformation has a "potential for harm if a conversion contrary to law occurred."

Judge Denies Elon Musk's Bid to Block OpenAI's Nonprofit Transition - Decrypt

A U.S. judge on Tuesday shot down Elon Musk's attempt to secure an injunction to halt OpenAI's transition from nonprofit to for-profit status, but agreed to an expedited trial later this year, marking the latest chapter in the bitter feud between the Tesla and SpaceX CEO and the AI company he once helped create. U.S. District Judge Yvonne Gonzalez Rogers ruled that Musk didn't provide enough evidence to block the conversion of OpenAI, which Musk co-founded in 2015 as a nonprofit before departing a few years later. "On balance, the court finds the emails are insufficient for purposes of the high burden required for a preliminary injunction, and the question of likelihood of success on the merits to be a toss-up," the judge wrote. Despite denying the immediate injunction, Judge Gonzalez Rogers acknowledged the public stakes involved. She fast-tracked the case toward a trial as soon as this fall. "Given the public interest at stake and potential for harm if a conversion contrary to law occurred, the court is prepared to expedite trial to the fall of 2025 solely on that claim and potentially the interrelated contract-based claims," she wrote. The ruling hands an early victory to OpenAI CEO Sam Altman, but keeps Musk's broader lawsuit alive, setting the stage for a high-profile courtroom showdown between the tech titans later this year. Musk claims that OpenAI abandoned its original mission, and is basing his lawsuit on that premise. He insists the company was founded to develop artificial intelligence for humanity's benefit, not to maximize profits for a few. OpenAI and Altman have consistently denied these allegations, saying this is just a tactic to prevent competition now that Musk has formed his own rival AI startup. "We welcome the court's decision," an OpenAI spokesperson told Business Insider. "This has always been about competition. Elon's own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for our mission or U.S. interests." OpenAI didn't immediately reply to a request for comment by Decrypt. Musk's legal team painted the ruling in a more positive light, focusing on the upcoming trial rather than the denied injunction. The team confirmed to Venture Beat that they expect to accept the court's offer to expedite the trial. "We look forward to a jury confirming that Altman accepted Musk's charitable contributions knowing full well they had to be used for the public's benefit rather than his own enrichment," Marc Toberoff, Elon Musk's lawyer, said in a statement shared with media outlets. The stakes couldn't be higher for both sides. For OpenAI, the for-profit transition represents a crucial step toward raising the massive capital needed to compete in the increasingly expensive AI arms race. For Musk, who now runs rival AI startup xAI, the case represents a chance to prevent what he views as a dangerous departure from OpenAI's founding principles and a key threat to xAI's business model. The legal drama intensified in recent weeks when Altman rejected a massive $97.4 billion takeover bid from a Musk-led group with a simple "no thank you." Altman, who maintains OpenAI isn't for sale, has suggested Musk is trying to slow down a competitor rather than protect the public good. Meanwhile, Japanese investment giant SoftBank is reportedly in talks to lead a funding round of up to $40 billion in OpenAI, potentially valuing the ChatGPT maker at $300 billion. That would dwarf the $75 billion valuation Musk's xAI has reportedly discussed in its own recent fundraising efforts. The case has spotlighted the tension between AI development costs and public benefit missions. OpenAI began as a nonprofit in 2015, later adding a "capped-profit" structure in 2019 to attract investment while maintaining its nonprofit mission. The current push to remove profit caps has triggered not just Musk's lawsuit, but also broader questions about AI governance and corporate responsibility.

Judge Rejects Musk's Bid to Halt OpenAI's For-Profit Shift | PYMNTS.com

A federal judge has ruled against Elon Musk's request for a court order preventing OpenAI from converting into a for-profit entity, though she signaled a willingness to fast-track a trial on the matter, according to Reuters. U.S. District Judge Yvonne Gonzalez Rogers issued her decision late Tuesday, stating that Musk failed to demonstrate a "likelihood of success on the merits" in his bid for a preliminary injunction. However, per Reuters, she acknowledged the case's significance and suggested a trial could take place as early as this fall. She emphasized the "public interest at stake and potential for harm if a conversion contrary to law occurred." Musk, an early backer of OpenAI, has been embroiled in a legal battle with the company and its CEO, Sam Altman, for over a year. According to Reuters, the Tesla and SpaceX chief executive alleges that OpenAI has strayed from its original nonprofit mission, thereby breaching its founding agreements. Read more: OpenAI Board Denies Receiving Formal Bid from Elon Musk The dispute escalated late last year when Musk expanded his lawsuit to include Microsoft as a defendant and sought a court order to halt OpenAI's transition to a for-profit structure. Additionally, Musk introduced his AI venture, xAI, as a plaintiff, arguing that OpenAI's actions were restricting fair competition in the AI sector. In a further development, Musk and a group of investors recently made an unsolicited $97.4 billion bid to acquire a controlling interest in OpenAI's nonprofit arm. Judge Rogers noted that this offer undermined Musk's assertion of "irreparable harm," per Reuters.