A U.S. judge has denied Elon Musk’s request to prevent OpenAI from transitioning to a for-profit business, dealing a setback to the billionaire entrepreneur amid his legal battle with the artificial intelligence company.
U.S. District Court Judge Yvonne Gonzalez Rogers ruled that Musk and his AI startup, xAI, failed to demonstrate the necessity of an injunction against OpenAI as the case moves toward trial. The ruling allows OpenAI to continue its shift from a nonprofit organization to a for-profit model.
Musk had filed the lawsuit in a California federal court, alleging that OpenAI violated antitrust laws and betrayed its original mission by prioritizing commercial interests. He argued that his initial financial backing of OpenAI was contingent on the company remaining a nonprofit and claimed OpenAI’s leadership, including CEO Sam Altman, had exploited his trust.
The judge, however, noted that Musk’s evidence—primarily email exchanges and social media posts—was not conclusive in proving the existence of a contractual obligation or charitable trust. She stated that while an injunction was not warranted at this stage, she would consider expediting a trial on the issue later this year.
The legal dispute highlights a growing rift between Musk and OpenAI’s leadership. The company’s board chairman recently rejected a Musk-led offer to acquire OpenAI for $97.4 billion, reinforcing its stance that the company is not for sale.
Musk co-founded OpenAI in 2015, contributing $45 million in funding. However, he left the organization in 2018, with OpenAI citing potential conflicts of interest due to Tesla’s increasing focus on artificial intelligence. Since then, OpenAI has evolved into a hybrid structure, maintaining its nonprofit status while operating a profit-driven subsidiary to attract investors and ensure financial sustainability.
The shift to a for-profit model, which Altman has defended as essential for the company’s growth, has only intensified tensions with Musk. In response, Musk launched his own AI company, xAI, in 2023 as an alternative to OpenAI’s direction.
As the case moves forward, OpenAI remains free to pursue its business transformation, while Musk continues his legal challenge.
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