Judge allows OpenAI to turn for-profit despite Musk lawsuit

A federal judge in California on Tuesday denied Elon Musk’s motion to stop OpenAI from becoming a for-profit company but indicated the tech tycoon’s case could proceed to a trial. U.S. District Judge Yvonne Gonzalez Rogers felt the merit of Musk’s argument wouldn’t hold up and rejected his request to stop the nonprofit’s shift to for-profit, according to her Tuesday order.

However, the court offered to grant an expedited trial to take place later this year over Musk’s accusation of OpenAI CEO Sam Altman breaching a charitable trust. Rogers found that the public interest and potential harm of an illegal conversion as justification for an expedited trial, according to her order. However, she did say that the full case was unlikely to be ready for trial until at least 2027.

What is Musk’s case for stopping the organization from becoming for-profit? Musk and Altman co-chaired OpenAI when the nonprofit was founded in 2015 with a focus on safety in the areas of technology and artificial intelligence development. The lawsuit alleges that Altman preyed on Musk’s altruism, feigning concern for the development of AI to get Musk to fund the nonprofit. After getting Musk’s funding, Altman created a for-profit subsidiary and sought investments from Microsoft, which prompted the split, according to the lawsuit. Musk filed a federal lawsuit against OpenAI last August.

How has Altman or OpenAI responded to Musk’s accusations? Musk sued to harass a competitor of his own company, xAI, Altman’s legal team wrote in a motion to dismiss the lawsuit. Musk abandoned OpenAI’s mission of developing safe AI after a failed attempt to dominate leadership, the filing continued. Altman’s attorneys wrote that Musk’s allegations did not support any claims of fraud, unjust enrichment, or contract breach.

Dig deeper: Read my recent report on Altman rejecting Musk’s $97 billion offer to buy OpenAI.