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.”
