Before the trial, the judge was taking into account Musk’s recent request for a preliminary injunction to stop OpenAI’s conversion.
Elon Musk, the CEO of Tesla, will have to appear in court and testify, a federal judge said Tuesday, adding that portions of his lawsuit against OpenAI to stop the company’s conversion to a for-profit company may go to trial.
“Something is going to trial in this case,” Oakland, California, U.S. District Judge Yvonne Gonzalez Rogers declared at the beginning of the hearing.
“(Elon Musk will) sit on the stand, present it to a jury, and a jury will decide who is right.”
Rogers was taking into account Musk’s recent request for a preliminary injunction to stop OpenAI’s conversion before it goes to trial. This is the most recent development in a court battle between the richest person in the world and OpenAI CEO Sam Altman.
Although she did not make a decision on Tuesday, Rogers hinted that Musk’s legal team had not provided sufficient proof for her to impose the injunction and that she might convene an evidentiary hearing in which both parties might present witnesses and supporting documentation.
In May 2021, Rogers last issued a preliminary injunction in the lawsuit Epic Games was bringing against Apple.
Musk and Altman cofounded OpenAI in 2015, but Musk departed before the business took off. In 2023, he launched xAI, a rival AI startup.
In order to obtain the funding necessary to create the strongest artificial intelligence models, OpenAI is currently attempting to change its status from nonprofit to for-profit.
Musk sued Altman and OpenAI last year, alleging that the company’s founders had first asked him to support a nonprofit organization that aimed to build AI for the good of humanity but were now more interested in turning a profit.
Later, he added federal antitrust and other allegations to the lawsuit, and in December, he asked the judge overseeing it to prevent OpenAI from becoming a for-profit company.
OpenAI has stated that it will take steps to have Musk’s case dismissed and that Musk “should be competing in the marketplace rather than the courtroom.”
Since OpenAI’s most recent fundraising round of $6.6 billion and a new round of up to $25 billion under discussion with SoftBank are contingent on the company restructuring to eliminate the nonprofit’s ownership, the stakes surrounding the company’s corporate transition have suddenly increased.
OpenAI’s attorneys stated at the hearing that the company should be permitted to turn into a for-profit business since doing so would be required to support the nonprofit’s objectives.
According to Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits, such a reorganization would be extremely uncommon. Historically, hospitals and other health care institutions—rather than venture capital-backed businesses—have been the ones to convert nonprofits to for-profits, she noted.