A U.S. judge has rejected billionaire Elon Musk’s plea for a preliminary injunction to halt OpenAI’s shift to a for-profit model, while also agreeing to expedite a trial set for this fall. This marks the latest development in the high-stakes legal battle.
Musk does not meet “the high burden required for a preliminary injunction” to prevent OpenAI’s conversion, stated U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California. However, Rogers emphasized in her order that she aims to resolve the lawsuit swiftly due to “the public interest at stake and potential for harm if a conversion contrary to law occurred.”
Yearlong legal battle
Musk and OpenAI, which he co-founded as a nonprofit in 2015 but departed before its rapid growth, have been engaged in a yearlong legal struggle. The CEO of Tesla and X social media accuses OpenAI of deviating from its original mission—to develop artificial intelligence for the benefit of humanity rather than for corporate gain.
OpenAI and its CEO Sam Altman have firmly denied these allegations. The lawsuit’s outcome is pivotal for the ChatGPT creator’s transition to a for-profit model, which OpenAI views as essential for securing additional funding and remaining competitive in the costly AI arena.
Read more: Elon Musk’s bid for OpenAI rejected: What’s next for the AI giant?
OpenAI welcomes decision
OpenAI further expressed approval of the judge’s ruling on Tuesday, asserting that Musk’s lawsuit, initiated after he launched rival startup xAI in 2023, has “always been about competition.” Microsoft‘s backing of OpenAI has not elicited a response to requests for comments.
Marc Toberoff, Musk’s attorney, conveyed satisfaction that the judge “offered an expedited trial on the core claims driving this case.” He added, “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.”
This ruling comes just weeks after Altman turned down a $97.4 billion unsolicited takeover proposal from a Musk-led consortium with a curt “no thank you.” Altman, who has stated that OpenAI is not for sale, claims that Musk has been attempting to hinder a competitor.
Funding talks and valuations
In related news, SoftBank Group is reportedly negotiating to spearhead a funding round of up to $40 billion in OpenAI, aiming for a valuation of $300 billion, as reported by Reuters in January. This potential valuation would significantly overshadow the $75 billion figure that xAI has been discussing in its recent fundraising efforts.
