OAKLAND, Calif. (AP) - Elon Musk's lawyers faced off with OpenAI in court Tuesday as a federal judge weighed the billionaire's ask for a court order that would block the ChatGPT maker from converting itself to a for-profit business.
U.S. District Judge Yvonne Gonzalez Rogers said it was a "stretch" for Musk to claim he will be irreparably harmed if she doesn't step in to stop OpenAI from progressing with its shift from a nonprofit research laboratory to a for-profit corporation.
But the judge likewise raised issues about OpenAI and its relationship with business partner Microsoft and said she wouldn't stop the case from moving to trial as soon as next year so a jury can choose.
"It is possible that what Mr. Musk is stating is real. We ´ ll learn. He ´ ll sit on the stand," she said.
Musk, an early OpenAI investor and board member, took legal action against the expert system company last year, first in a California state court and equipifieds.com later in federal court, alleging it had betrayed its founding aims as a not-for-profit research laboratory benefiting the public good. Musk had invested about $45 million in the startup from its starting until 2018, his attorney said Tuesday.
Musk escalated the legal conflict late last year, adding new claims and offenders and asking for a court order that would stop OpenAI ´ s plans to convert itself into a for-profit organization more completely. Musk also added his own AI company, xAI, as a plaintiff.
Also targeted by Musk's claim is OpenAI's close business partner Microsoft and tech business owner Reid Hoffman, a previous OpenAI board member who likewise rests on Microsoft's board.
Gonzalez Rogers said she has a high bar for authorizing the sort of initial injunction that Musk wants but hasn't yet ruled on the request. She did state she had "significant concerns" with 2 people connected to Microsoft on OpenAI's board - Hoffman and longtime Microsoft executive Deanna Templeton, who was a "non-voting observer."
"So you desire me to think that she was sitting there listening to all the conversations and not telling anyone? What would the point be for her to sit there and listen to everyone, if not to communicate what she was listening? There would be no point for her to be there, which is why she really needs to not be there," she said.
Hoffman, a co-founder of LinkedIn, has actually been on Microsoft ´ s board because quickly after the tech huge bought the task networking website. He stepped down from OpenAI's board in 2023 to prevent conflicts with his AI startup, Inflection.
Templeton, who Musk likewise named as an offender, was added as a non-voting member of OpenAI ´ s board in the aftermath of Altman ´ s ouster after Microsoft CEO Satya Nadella looked for more stability on the board. But months later, she was dropped from the OpenAI board as U.S. antitrust enforcers were revealing issues about such plans on corporate boards.
The judge has managed a variety of tech industry cases including Apple's battle with Epic Games, though she said Tuesday that Musk's case is "absolutely nothing like" that one. That case was also the last time she gave a preliminary injunction, in 2020, 8 months before the case went to trial.
Then-President Barack Obama designated Gonzalez Rogers to the federal bench in 2011.
Tuesday's hearing was originally set for January but was delayed after Musk's lawyer Marc Toberoff said his home was ruined in the Pacific Palisades wildfire.
Musk, who did not go to the hearing, has declared in the claim that the business are breaching the terms of his fundamental contributions to the charity. Judge Gonzalez Rogers called it a "stretch" to claim "irreparable harm" to Musk, and called the case "billionaires vs. billionaires." She questioned why Musk invested 10s of millions in OpenAI without a composed agreement. Toberoff said it was since the relationship in between Altman and Musk at the time was "constructed on trust" and the two were very close.
"That is simply a great deal of money" to invest "on a handshake," the judge said.
OpenAI has actually said Musk ´ s requested court order would "cripple OpenAI ´ s company"and objective to the advantage of Musk and his own AI company and is based on "far-fetched" legal claims.
At the heart of the disagreement is a 2017 internal power struggle at the recently established start-up that caused Altman ending up being OpenAI ´ s CEO
. Emails revealed by OpenAI reveal Musk had actually likewise sought to be CEO and grew frustrated after 2 other OpenAI co-founders said he would hold excessive power as a significant shareholder and primary executive if the start-up succeeded in its objective to attain better-than-human AI called artificial general intelligence, or AGI. Musk has long voiced concerns about how sophisticated types of AI could threaten mankind.
Altman eventually prospered in becoming CEO and has actually remained so except for a duration in 2023 when he was fired and then reinstated days later after the board that ousted him was changed.
OpenAI has looked for to demonstrate Musk ´ s early support for the concept of making OpenAI a for-profit company so it could raise cash for the hardware and computer system power that AI requires.
Musk is not the only one tough OpenAI's for-profit transition. Facebook and Instagram parent Meta Platforms has actually asked California's attorney general to block it, and the workplace of Delaware's chief law officer has said it is evaluating the conversion.
It was unclear Tuesday when the case may go to trial. Musk's legal at first said they would be ready by June after some back-and-forth with the two sides the judge indicated it probably will not be until June 2026 at the earliest, but likely early 2027.
O'Brien reported from Providence, Rhode Island.
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