(Credit: Saul Loed/AFP via Getty Images)
A federal judge in California has denied Elon Musk’s request to block OpenAI’s transition to a for-profit entity.
In her ruling denying the motion, Judge Yvonne Gonzalez Rogers wrote that Elon Musk and the other plaintiffs had “failed to meet their burden of proof for the extraordinary relief requested." Still, she offered to expedite the trial to this fall, “given the public interest at stake and potential for harm if a conversion contrary to law occurred.”
Musk filed the injunction in December, aiming “to preserve what is left of OpenAI’s non-profit character” and to stop OpenAI from telling its investors not to invest in competitors such as xAI. The company's conversion is anti-competitive in nature and could result in “widespread investor losses and market disruption,” he claimed.
Musk was a co-founder of the nonprofit OpenAI in 2015. In his lawsuit against OpenAI filed in March last year, he claimed that the company was initially intended to be the opposite of Google, keeping its tech open-source and its governance free from financial obligations. “It would be a non-profit developing AGI for the benefit of humanity, not for a for-profit company seeking to maximize shareholder profits,” the lawsuit claimed.
After Musk left the board in 2018, OpenAI became a capped-profit company in 2019. Last year, it announced a for-profit subsidiary to cover “the cost of computational power and talent required to push” its core research forward amid rising competition.
Both OpenAI and Musk welcomed Judge Rogers' Tuesday ruling.
“This has always been about competition. 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,” OpenAI said in a statement to the AP.
Musk’s lawyer, Marc Toberoff, focused on the expedited trial. “We look forward to a jury confirming that [OpenAI CEO Sam] Altman accepted Musk’s charitable contributions knowing full well they had to be used for the public’s benefit rather than his own enrichment," he said.