Musk thwarted in bid to halt OpenAI’s for-profit shift
Judge denies preliminary injunction but agrees to fast-track trial over turning nonprofit into a company
05 March 2025 - 16:21
byAgency Staff
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A US judge on Tuesday denied Elon Musk’s request for a preliminary injunction to pause OpenAI’s transition to a for-profit model but agreed to a fast-track trial in the third quarter of the year, the latest turn in the high-stakes legal fight.
Musk does not have “the high burden required for a preliminary injunction” to block the conversion of OpenAI, said US District Judge Yvonne Gonzalez Rogers.
But Rogers wrote in the order that she wanted to resolve the lawsuit quickly given “the public interest at stake and potential for harm if a conversion contrary to law occurred”.
Musk and OpenAI, which he co-founded as a nonprofit in 2015 but left before it took off, have been embroiled in a year-long legal battle. The CEO of Tesla and X social media accuses OpenAI of straying from its founding mission — to develop AI for the good of humanity, not corporate profit.
OpenAI and its CEO Sam Altman have denied the allegations. At stake is the ChatGPT maker’s transition to a for-profit model, which the start-up sees as crucial to raising more capital and competing well in the expensive AI race.
OpenAI welcomed the judge’s decision, saying the lawsuit by Musk, who launched rival start-up xAI in 2023, has “always been about competition”. OpenAI’s main backer, Microsoft , did not respond to a request for comment.
Marc Toberoff, a lawyer for Musk, said they were pleased the judge “offered an expedited trial on the core claims driving this case”.
“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,” Toberoff said.
The ruling comes weeks after Altman rejected a $97.4bn unsolicited takeover bid from a Musk-led consortium. Altman, who has said OpenAI is not for sale, alleges Musk has been trying to slow down a competitor.
SoftBank Group is in talks to lead a funding round of as much as $40bn in OpenAI at a valuation of $300bn, Reuters reported in January. That would dwarf the $75bn valuation than Musk’s xAI has discussed in a recent fundraise, according to reports.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Musk thwarted in bid to halt OpenAI’s for-profit shift
Judge denies preliminary injunction but agrees to fast-track trial over turning nonprofit into a company
A US judge on Tuesday denied Elon Musk’s request for a preliminary injunction to pause OpenAI’s transition to a for-profit model but agreed to a fast-track trial in the third quarter of the year, the latest turn in the high-stakes legal fight.
Musk does not have “the high burden required for a preliminary injunction” to block the conversion of OpenAI, said US District Judge Yvonne Gonzalez Rogers.
But Rogers wrote in the order that she wanted to resolve the lawsuit quickly given “the public interest at stake and potential for harm if a conversion contrary to law occurred”.
Musk and OpenAI, which he co-founded as a nonprofit in 2015 but left before it took off, have been embroiled in a year-long legal battle. The CEO of Tesla and X social media accuses OpenAI of straying from its founding mission — to develop AI for the good of humanity, not corporate profit.
OpenAI and its CEO Sam Altman have denied the allegations. At stake is the ChatGPT maker’s transition to a for-profit model, which the start-up sees as crucial to raising more capital and competing well in the expensive AI race.
OpenAI welcomed the judge’s decision, saying the lawsuit by Musk, who launched rival start-up xAI in 2023, has “always been about competition”. OpenAI’s main backer, Microsoft , did not respond to a request for comment.
Marc Toberoff, a lawyer for Musk, said they were pleased the judge “offered an expedited trial on the core claims driving this case”.
“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,” Toberoff said.
The ruling comes weeks after Altman rejected a $97.4bn unsolicited takeover bid from a Musk-led consortium. Altman, who has said OpenAI is not for sale, alleges Musk has been trying to slow down a competitor.
SoftBank Group is in talks to lead a funding round of as much as $40bn in OpenAI at a valuation of $300bn, Reuters reported in January. That would dwarf the $75bn valuation than Musk’s xAI has discussed in a recent fundraise, according to reports.
Reuters
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