A U.S. District Judge, Yvonne Gonzalez Rogers, announced on Tuesday that parts of Elon Musk’s lawsuit against OpenAI could go to trial, with Musk himself required to testify in court. The case, which centers on Musk’s effort to block OpenAI’s transition to a for-profit entity, is evolving into a public legal battle between Musk and OpenAI CEO Sam Altman.
Judge Rogers, presiding in Oakland, California, stated that “something is going to trial in this case,” and indicated that Musk would be called to the stand to present his case to a jury. She also noted that Musk’s legal team had not provided sufficient evidence to issue a preliminary injunction halting the transition, suggesting the possibility of an evidentiary hearing where both sides could present witnesses and evidence.
The case stems from Musk’s claims that OpenAI’s founders initially approached him to help fund a nonprofit organization focused on developing artificial intelligence (AI) for the benefit of humanity. However, Musk contends that OpenAI has since shifted its focus to making a profit. Musk’s lawsuit, filed last year, expanded to include antitrust and other claims against the company. He has asked the court to prevent OpenAI from completing its transition to a for-profit business.
OpenAI, in its defense, has moved to dismiss Musk’s claims, arguing that Musk should focus on competing in the marketplace rather than through legal channels. The company argues that restructuring to a for-profit entity is necessary to secure the capital needed to continue developing advanced AI models. A recent fundraising round of $6.6 billion and a potential future round of up to $25 billion from SoftBank hinge on OpenAI’s restructuring.
The situation has raised questions about the unusual nature of nonprofit organizations converting into for-profit entities. Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits, pointed out that such transitions are typically seen in health care sectors, not in venture capital-backed tech companies.
