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

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

Musk cofounded OpenAI with Altman in 2015

OpenAI argues for-profit move required for capital

Nonprofit to for-profit conversion rare, professional says

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

By Anna Tong and 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 affirm.

"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 thinking about Musk's current ask for a preliminary injunction to obstruct OpenAI's conversion before going to trial, the current move in an animosity match in between the world's wealthiest person and OpenAI CEO Sam Altman that is playing out openly in court.

Rogers did not decide whether to release the injunction Tuesday, but at one point recommended that Musk's legal team had actually not presented enough proof for her to release the injunction, bybio.co and indicated she may hold an evidentiary hearing, where both sides could provide witnesses and evidence. The last time Rogers offered an initial injunction remained in Epic Games' case against Apple in May 2021.

Musk cofounded OpenAI with Altman in 2015, but left before the company removed and subsequently founded the completing AI startup xAI in 2023. OpenAI is now attempting to shift from a not-for-profit into a for-profit entity, which it states it requires to do to secure the capital needed to establish the best synthetic intelligence designs. In 2015, Musk submitted a claim against OpenAI and Altman, saying that OpenAI ´ s creators initially him to money a nonprofit concentrated on establishing AI to benefit mankind, however that it is now concentrated on making cash. He later on broadened the claim to include federal antitrust and other claims, setiathome.berkeley.edu and in December asked the judge commanding the case to stop OpenAI from transitioning to a for-profit.

In reaction to Musk ´ s claim, OpenAI has said it will relocate to dismiss Musk ´ s claims and that Musk "need to be contending in the market rather than the courtroom." The stakes on OpenAI's business shift have actually now intensified, library.kemu.ac.ke 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 remove the not-for-profit ´ s manage.

During the hearing, OpenAI's lawyers said the factor to permit OpenAI to end up being a for-profit entity is because it would be necessary to facilitate the objective of the not-for-profit.

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