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1 Musk's Claim against OpenAI May go to Trial In Part, Judge Says

Musk takes legal action against to block OpenAI's conversion to a for-profit structure

Musk cofounded OpenAI with Altman in 2015

OpenAI argues for-profit move needed for capital

Nonprofit to for-profit conversion unusual, expert says

(Adds judge did not decide whether or not to release the injunction in paragraph 5, OpenAi's attorneys' comment in paragraph 13)

By Anna Tong and genbecle.com Akash Sriram

OAKLAND, Calif., Feb 4 (Reuters) - A federal judge said on Tuesday that parts of Elon Musk's claim against OpenAI to halt its conversion to a for-profit entity may go to trial, adding that the Tesla CEO will have to appear in court and testify.

"Something is going to trial in this case," U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, said early in the court session.

"(Elon Musk will) rest on the stand, present it to a jury, and a jury will choose who is right." Rogers was considering Musk's current request for an initial injunction to block OpenAI's conversion before going to trial, the most recent move in an animosity match between the world's richest individual and OpenAI CEO Sam Altman that is playing out openly in court.

Rogers did not decide whether to release the injunction Tuesday, menwiki.men however at one point suggested that Musk's legal group had actually not provided sufficient evidence for her to issue the injunction, and indicated she may hold an evidentiary hearing, where both sides could provide witnesses and proof. The last time Rogers supplied a preliminary injunction remained in Epic Games' case against Apple in May 2021.

Musk cofounded OpenAI with Altman in 2015, however left before the business took off and subsequently established the contending AI startup xAI in 2023. OpenAI is now trying to shift from a not-for-profit into a for-profit entity, which it says it requires to do to secure the capital required to the finest expert system models. In 2015, Musk filed a claim against OpenAI and Altman, stating that OpenAI ´ s creators originally approached him to money a nonprofit concentrated on establishing AI to benefit humanity, however that it is now concentrated on earning money. He later expanded the claim to add federal antitrust and other claims, and in December asked the judge commanding the case to stop OpenAI from transitioning to a for-profit.

In response to Musk ´ s claim, OpenAI has said it will relocate to dismiss Musk ´ s claims and that Musk "must be contending in the marketplace instead of the courtroom." The stakes on OpenAI's business transition have actually now escalated, as OpenAI ´ s last fundraising round of $6.6 billion and a brand-new round of as much as $25 billion under conversation with SoftBank are conditioned on the company reorganizing to get rid of the nonprofit ´ s control.

During the hearing, OpenAI's attorneys said the factor surgiteams.com to allow OpenAI to end up being a for-profit entity is because it would be essential to help with the mission of the not-for-profit.

Such a restructuring would be extremely uncommon, said Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits. Nonprofit conversions to for-profits have traditionally been for healthcare companies like healthcare facilities, not endeavor capital-backed business, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)