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Elon Musk’s attempt to immediately halt OpenAI’s conversion to a for-profit company was struck down by a US federal court on Tuesday, although the broader trial was expedited to this autumn.
OpenAI is in the process of converting from a complex non-profit structure into a more conventional for-profit company. Musk sought to derail that process late last year, claiming OpenAI and its founder Sam Altman had behaved in an anti-competitive manner and betrayed the group’s founding mission by pursuing artificial intelligence for a profit rather than the public benefit.
On that basis, Musk requested an injunction to pause the process while his litigation played out. Judge Yvonne Gonzalez Rogers, of the Northern District of California, dismissed all four arguments underpinning Musk’s injunction request, writing that they “failed to meet their burden of proof for the extraordinary relief requested”.
Musk claimed OpenAI had broken antitrust rules by asking investors in the company to avoid backing rivals, and that the company’s conversion is in breach of its commitments to early donors, including Musk himself.
But, Gonzalez Rogers added the court would expedite a trial to the autumn of this year on Musk’s claim that OpenAI’s conversion is unlawful, on the basis of “the public interest at stake and potential for harm if a conversion contrary to law occurred”.
The case is one in a series of salvos launched by the world’s richest man against OpenAI in recent months. Last year, Musk filed a lawsuit against Altman, OpenAI and its chief backer Microsoft for breach of contract, and last month made a surprise $97.4bn bid for effective control over the company.
Musk and Altman are competing for dominance in AI, a field that both have said they expect to transform economic activity and society. Musk, the billionaire Tesla chief executive, set up a rival company, xAI, in 2023. That start-up rapidly raised well more than $10bn and built one of the largest data centres in the world to train new AI models.
The feud has a personal dimension: Musk co-founded OpenAI in 2015 and donated about $45mn to the company, before leaving the board in 2018 after clashing with Altman. Musk has since accused Altman of “perfidy and deceit [of] Shakespearean proportions” and described him as “swindly Sam”.
Altman in return has said: “I feel for the guy. I don’t think he’s like a happy person.”
Musk’s claim that Altman behaved in an anti-competitive manner by asking investors to avoid backing rival AI start-ups, including xAI, was central to the injunction request. Gonzalez Rogers dismissed that claim, citing Altman’s declaration to the court, which said he had not told investors that backing OpenAI meant they could not invest in rivals.
Instead, Altman said he had only indicated that “certain investors who were to be granted access to OpenAI’s confidential information on an ongoing basis were informed that OpenAI would need to terminate their rights to that information if they made non-passive investments in OpenAI’s competitors”.
Musk claimed Altman and fellow OpenAI co-founder Greg Brockman “took advantage of Musk’s altruism in order to lure him into funding the venture”, according to Tuesday’s court filing. But Gonzalez Rogers also denied an injunction on the basis that Altman and Brockman had breached a contract with Musk by pushing to convert to a for-profit company.
OpenAI and Musk’s attorney did not immediately respond to a request for comment.
