A U.S. federal judge ruled on Tuesday that parts of Elon Musk’s lawsuit against OpenAI might go to trial. The judge also stated that Musk will need to appear in court and testify.
U.S. District Judge Yvonne Gonzalez Rogers, speaking from Oakland, California, said, “Something is going to trial in this case.” She added, “Elon Musk will sit on the stand, present it to a jury, and a jury will decide who is right.”
The case began after Musk asked for a preliminary injunction to stop OpenAI’s shift from being a nonprofit to a for-profit organization. This legal battle is part of an ongoing public dispute between Musk, the CEO of Tesla, and Sam Altman, the CEO of OpenAI.
Musk co-founded OpenAI with Altman in 2015 but left the company before it grew. In 2023, he launched his own AI startup, xAI, to compete with OpenAI. Now, OpenAI wants to transition into a for-profit company to raise the funds needed to improve its AI models.
Musk argues that OpenAI’s original mission was to create a nonprofit focused on developing AI for the benefit of humanity, but he believes the company is now focused on making money. In his lawsuit, Musk expanded his claims to include federal antitrust issues and asked the judge to block OpenAI’s move to a for-profit structure.
OpenAI responded by seeking to dismiss Musk’s lawsuit, stating that Musk should be competing in the market rather than in court.
The stakes are higher now, as OpenAI’s recent $6.6 billion fundraising round and a potential $25 billion deal with SoftBank depend on the company’s restructuring. This move would remove nonprofit control from OpenAI, which is highly unusual for organizations like this.
Rose Chan Loui, executive director at the UCLA Law Center for Philanthropy and Nonprofits, noted that nonprofit-to-for-profit conversions usually happen in healthcare organizations, not in venture capital-backed companies like OpenAI.
