Judge Denies Musk's Bid to Halt OpenAI's For-Profit Shift, Fast Tracks Trial

Marc Toberoff, a lawyer for Musk, said they were pleased the judge "offered an expedited trial on the core claims driving this case".

By Reuters | Updated: 6 March 2025 10:53 IST

Judge Denies Musk's Bid to Halt OpenAI's For-Profit Shift, Fast Tracks Trial

Photo Credit: Reuters

Altman recently rejected a $97.4 billion unsolicited takeover bid led by Musk

Highlights

Musk accuses OpenAI of straying from its founding mission
He says OpenAI aimed to develop AI for the good or humanity, not profits
OpenAI and its CEO Sam Altman have denied the allegations

A US judge on Tuesday denied billionaire 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 fall of this 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 in Oakland, California.

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."

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Musk and OpenAI, which he co-founded as a nonprofit in 2015 but left before it took off, have been embroiled in a yearlong legal battle. The CEO of Tesla and X social media accuses OpenAI of straying from its founding mission — to develop artificial intelligence for the good of humanity, not corporate profit.

OpenAI and its CEO Sam Altman have denied the allegations. At stake in the lawsuit is the ChatGPT maker's transition to a for-profit model, which the startup sees as crucial to raising more capital and competing well in the expensive AI race.

OpenAI welcomed the judge's decision on Tuesday, saying the lawsuit by Musk, who launched rival startup xAI in 2023, has "always been about competition". OpenAI's main backer, Microsoft, did not respond to a request for comment.

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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 $97.4 billion (roughly Rs. 8,47,793 crore) unsolicited takeover bid from a Musk-led consortium with a "no thank you." Altman, who has said OpenAI is not for sale, alleges that Musk has been trying to slow down a competitor.

SoftBank Group is in talks to lead a funding round of up to $40 billion (roughly Rs. 3,48,170 crore) in OpenAI at a valuation of $300 billion (roughly Rs. 26,11,213 crore), Reuters reported in January. That would dwarf the $75 billion (roughly Rs. 6,52,803 crore) valuation xAI has discussed in a recent fundraise, according to reports.

© Thomson Reuters 2025

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