A U.S. judge has denied Elon Musk’s request to prevent OpenAI from transitioning into a for-profit business, marking a legal setback for the billionaire amid his ongoing feud with OpenAI CEO Sam Altman.
Judge Yvonne Gonzalez Rogers ruled on Tuesday that Musk and his artificial intelligence startup, xAI, failed to justify the need for an injunction against OpenAI.
However, she signaled readiness to fast-track a trial on the matter later this year.
This decision allows OpenAI to continue its shift from a non-profit organization to a for-profit business, a move that has fueled tensions between Musk and Altman.
Musk’s Claims Against OpenAI
Musk, a co-founder of OpenAI, sued the company in a California federal court, arguing that it had violated antitrust laws and broken the original agreement to remain a non-profit entity.
He claimed OpenAI’s leadership, including Altman, had “taken advantage of his altruism” to secure his financial backing while secretly planning a transition to a for-profit model.
The judge, however, noted that Musk’s case relied on email exchanges and social media posts, which may not be legally sufficient to prove the existence of a binding contract or charitable trust.
OpenAI Rejects Musk’s Buyout Offer
Tensions between Musk and OpenAI escalated further in February when OpenAI’s board unanimously rejected Musk’s $97.4 billion buyout offer.
“OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition,” OpenAI Board Chair Bret Taylor stated.
Currently, OpenAI operates as a hybrid organization—a nonprofit with a for-profit subsidiary.
Altman has argued that shifting to a for-profit model is essential for securing funding and ensuring long-term growth in AI development.
Musk vs. OpenAI: A Long-Standing Feud
Musk, who co-founded OpenAI in 2015 and invested $45 million in its early days, left the company in 2018.
At the time, OpenAI cited a potential conflict of interest with Musk’s growing AI ambitions at Tesla.
In 2023, Musk launched his own AI company, xAI, to compete with OpenAI, further intensifying the rivalry.
As AI technology continues to evolve, OpenAI’s transition to a for-profit model is likely to remain a hot topic in the tech world.
The upcoming trial could determine whether Musk has a legal case—or if OpenAI will proceed with its plans unchallenged.
Stay tuned to NIGPOST for more updates on this developing story.
Leave a Reply