A federal judge on March 4 rejected billionaire Elon Musk’s attempt to halt OpenAI’s transition from nonprofit to for-profit status.
Emails introduced by Musk in the legal case, which was filed in California, are suggestive but “on balance, the Court finds the emails are insufficient for purposes of the high burden required for a preliminary injunction and the question of likelihood of success on the merits to be a toss-up,” U.S. District Judge Yvonne Gonzalez Rogers wrote in a 16-page decision.
Musk alleged in the lawsuit that Sam Altman, OpenAI’s founder, deceived him because, while soliciting donations, he portrayed OpenAI as a nonprofit that would provide open-source data on artificial intelligence, only to later move the entity towards operating for profit.
In one email, Altman wrote that the technology would be owned by a foundation and “used for the good of the world.”
Lawyers for Musk said that the missives supported his position that his donations were contingent on OpenAI remaining a nonprofit.
Attorneys for Altman and other defendants said there is no evidence that the donations were solicited subject to any such commitment.
U.S. District Judge Yvonne Gonzalez Rogers said that she disagreed with that framing. “At the same time, though highly suggestive, the emails do not by themselves necessarily demonstrate a likelihood of success. There is, for example, defendants’ counterevidence implying that Musk himself considered the possibility of being the one to turn OpenAI into a for-profit,” she wrote.
A preliminary injunction would have prevented OpenAI from transitioning to for-profit status while the case proceeds. While Rogers declined to enter an injunction, she did express openness to fast-tracking the trial.
“Given the public interest at stake and potential for harm if a conversion contrary to law occurred, the Court is prepared to expedite trial to the fall of 2025 solely on that claim and potentially the interrelated contract-based claims,” Rogers said.
OpenAI welcomed the judge’s decision, alleging that the lawsuit by Musk, who launched rival startup xAI in 2023, has “always been about competition.”
Marc Toberoff, a lawyer representing Musk, said they were pleased the judge “offered an expedited trial on the core claims driving this case,” adding “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.”
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