Elon Musk has been handed a legal setback in his attempt to use the US court system to block OpenAI from converting itself to a for-profit company.
The Associated Press reported that a federal judge has denied Elon Musk’s request for a court order blocking OpenAI from converting itself to a for-profit company, but said she could expedite a trial to consider Musk’s claims against the ChatGPT maker and its CEO.
Elon Musk had initially sued OpenAI in March 2024 for breach of contract, alleging the firm was no longer following its original non-profit principles.
Musk “messing with us”
OpenAI then issued a very public and point by point rebuttal of Musk’s allegations, by directly comparing them to Musk’s own words within his own emails.
Musk abruptly withdrew his original lawsuit without explanation in June 2024, a day before a judge was due to rule on OpenAI’s request for it to be dismissed.
But in August 2024 Musk filed a “more forceful” lawsuit, alleging that that OpenAI and its co-founders Sam Altman and Greg Brockman had gone against the company’s founding principles by prioritising commercial interests over the public good.
In September 2024 OpenAI said it was restructuring itself into “for-profit benefit corporation” – a significant move away from its “non-profit” roots.
In December 2024 Elon Musk asked a federal court for an injunction to stop OpenAI from converting into a full for-profit business.
Then last month Elon Musk and a group of investors offered about $97.4 billion to buy the non-profit behind OpenAI.
OpenAI CEO Sam Altman immediately publicly stated Musk’s offer was “ridiculous”, and “the company is not for sale”.
“Altman also noted that the ‘offer’ was “another one of his (Musk’s) tactics to mess with us,” and he had not paid any attention to it, as it “doesn’t matter.”
Elon Musk then claimed he would withdraw his $97.4 billion offer to buy the non-profit behind OpenAI, but only it drops its plan to convert into a for-profit operation.
Judge’s ruling
Now US District Judge Yvonne Gonzalez Rogers ruled late Tuesday that “Musk has not demonstrated likelihood of success on the merits” in his request for a preliminary injunction.
She offered to hold a trial in her California courtroom as soon as this Autumn, “given the public interest at stake and potential for harm if a conversion contrary to law occurred.”
The Judge also noted that Musk’s unsolicited $97.4 billion bid to buy a controlling stake in the non-profit is a move that undermined Musk’s “claim of irreparable harm”.
OpenAI said it welcomed the court’s decision, AP noted.
“This has always been about competition,” a statement from the company said. “Elon’s own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for our mission or US interests.”
Meanwhile Musk’s attorney Marc Toberoff said in a statement late Tuesday that he is pleased that the court offered an expedited trial on the core claims.
“We look forward to a jury confirming that Altman accepted Musk’s charitable contributions knowing full well they had to be used for the public’s benefit rather than his own enrichment,” Toberoff reportedly said.
