A mobile phone in Boston displays the OpenAI logo on March 9, 2023. (Photo by Michael Dwyer/AP)
A U.S. federal judge has turned down Elon Musk’s request to block OpenAI from shifting to a for-profit model, but she is open to fast-tracking a trial to examine his claims against the AI firm and its CEO, Sam Altman.
On Tuesday, Judge Yvonne Gonzalez Rogers ruled that Musk had not shown a strong enough case to justify an immediate injunction. However, she suggested a trial could begin as soon as this fall, considering the public’s interest in the case and potential legal violations.
Musk, an early supporter and investor in OpenAI, has been in a legal battle with the company for over a year. He accused OpenAI and Altman of straying from their original nonprofit mission and breaching agreements. Last year, he took his fight further by suing Microsoft, arguing that OpenAI’s ties to the tech giant unfairly limited competition. He also added his own AI company, xAI, as a plaintiff.
To complicate matters, Musk and a group of investors recently made an unsolicited $97.4 billion offer to take control of OpenAI’s nonprofit arm. Judge Gonzalez Rogers noted that this weakened Musk’s argument of “irreparable harm” since he was actively trying to buy into the company.
OpenAI welcomed the court’s ruling. In a statement, the company emphasized that Musk’s legal action was more about competition than principle. “Elon wanted to merge a for-profit OpenAI into Tesla for his own benefit, not for our mission or the interests of the U.S.,” the company stated.
Musk’s lawsuit claims OpenAI violated terms tied to his financial contributions, which totalled around $45 million between its founding and 2018. His attorney, Marc Toberoff, expressed optimism about the upcoming trial, stating they were eager to prove that Altman misused Musk’s donations for personal gain rather than for the public good.
During a hearing last month, Judge Gonzalez Rogers expressed skepticism about Musk’s claim of irreparable harm, calling the case a battle of “billionaires vs. billionaires.” She also questioned why Musk invested millions without a formal contract, to which his lawyer responded that Musk and Altman had a strong relationship built on trust at the time.
This legal dispute traces back to a power struggle within OpenAI in 2017. Musk, who previously aimed to become OpenAI’s CEO, grew frustrated when co-founders blocked him, fearing he would have excessive control. Musk has long warned about the dangers of artificial intelligence, believing unchecked AI could threaten humanity.
Altman ultimately secured the CEO role and remains in charge, except for a brief period in 2023 when he was fired and swiftly reinstated.
Judge Gonzalez Rogers, known for handling high-profile tech cases such as Apple’s dispute with Epic Games, emphasized that Musk’s case is distinct. She noted that the last time she granted a preliminary injunction was months before trial in the Apple-Epic case, indicating that Musk’s request did not meet the same legal standards.
