OAKLAND, Calif. (AP) — In a recent legal development, U.S. District Judge Yvonne Gonzalez Rogers has dismissed Elon Musk's request for a court order to prevent OpenAI from transitioning into a for-profit entity. However, she expressed willingness to expedite a trial to assess Musk’s allegations against the AI organization and its Chief Executive Officer, Sam Altman. Late Tuesday's ruling highlighted that Musk did not establish a substantial likelihood of succeeding on the merits of his argument for a preliminary injunction, but acknowledged the public interest and potential harms associated with OpenAI's proposed conversion.
This legal confrontation began a year ago when Musk, an early investor in OpenAI, initiated legal proceedings alleging breach of contract. He contended that the company betrayed its founding mission as a nonprofit. Since then, Musk has intensified his legal actions, expanding the scope to include additional claims and parties, notably Microsoft. Furthermore, he has stated that his own AI venture, xAI, is a plaintiff in this case, arguing that OpenAI is unfairly limiting business competition. Recently, Musk and a group of investors made a substantial unsolicited bid of $97.4 billion to acquire a controlling interest in OpenAI, which was noted by the judge as contradicting Musk's claims of irreparable harm.
OpenAI responded positively to the court's decision, stating that the lawsuit primarily revolves around competition. The organization emphasized that Musk's own communications reveal intentions to merge a for-profit version of OpenAI with Tesla, which would have served Musk's personal interests rather than the overarching mission aimed at public benefit.
Musk’s allegations include that OpenAI and Altman are transgressing the terms associated with his foundational donations to the organization, having contributed approximately $45 million from its inception until 2018, according to his attorney. Marc Toberoff, representing Musk, conveyed satisfaction with the judge’s offer for an expedited trial focused on the main claims, expressing optimism that a jury would confirm that Altman had accepted Musk's charitable contributions with the understanding that these funds were meant for public good.
During a previous hearing, Judge Gonzalez Rogers remarked on the difficulty of establishing "irreparable harm" for Musk, characterizing the situation as a conflict between billionaires. She raised questions about Musk's decision to invest millions in OpenAI absent a written contract. Toberoff defended Musk's actions by stating that the relationship between Musk and Altman was initially built on trust and closeness.
The origins of this dispute trace back to a 2017 internal power struggle within OpenAI that resulted in Altman ascending to the CEO position. Emails released by OpenAI indicate that Musk had aspirations to become the CEO and experienced discontent when other co-founders expressed concerns about his potential authority as a major stakeholder in a successful AI venture aimed at achieving artificial general intelligence.
Currently, Altman has maintained his role as CEO, with a brief interruption in 2023 when he was ousted and subsequently reinstated after the board that dismissed him was replaced. Judge Gonzalez Rogers, who was appointed by then-President Barack Obama in 2011, has presided over several technology industry cases, reinforcing that Musk’s situation differs significantly from previous cases, such as Apple's legal battle with Epic Games.
Musk's ongoing legal battle with OpenAI, characterized by its complexity and the high stakes involved, continues to unfold as both parties prepare for an expedited trial to address the foundational issues raised.
