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1 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 relocation required for capital

Nonprofit to for-profit conversion uncommon, professional states

(Adds judge did not decide whether to issue the injunction in paragraph 5, OpenAi's lawyers' comment 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 might go to trial, including 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) sit on the stand, present it to a jury, and a jury will choose who is right." Rogers was considering Musk's current demand for gdprhub.eu an initial injunction to obstruct OpenAI's conversion before going to trial, the most current relocation in a grudge match between the world's richest individual and OpenAI CEO Sam Altman that is playing out publicly in court.

Rogers did not decide whether to issue the injunction Tuesday, but at one point recommended that Musk's legal group had not presented sufficient proof for her to release the injunction, and suggested she might hold an evidentiary hearing, where both sides might present witnesses and proof. The last time Rogers offered a preliminary injunction remained in Epic Games' case against Apple in May 2021.

OpenAI with Altman in 2015, but left before the company removed and consequently established the contending AI startup xAI in 2023. OpenAI is now trying to transition from a nonprofit into a for-profit entity, which it says it requires to do to secure the capital needed to develop the finest expert system designs. In 2015, Musk filed a claim against OpenAI and Altman, saying that OpenAI ´ s creators initially approached him to money a not-for-profit focused on establishing AI to benefit humanity, however that it is now concentrated on making cash. He later on broadened 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 move to dismiss Musk ´ s claims and that Musk "should be contending in the market instead of the courtroom." The stakes on OpenAI's business transition have 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 not-for-profit ´ s control.

During the hearing, OpenAI's lawyers said the reason to enable OpenAI to become a for-profit entity is due to the fact that it would be needed to help with the objective of the nonprofit.

Such a restructuring would be highly 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 classifieds.ocala-news.com healthcare companies like hospitals, not venture capital-backed companies, she said. (Reporting by Anna Tong in Oakland and Akash Sriram in Bengaluru, Editing by Marguerita Choy)