Elon Musk has lost the first stage of the OpenAI lawsuit
On Tuesday, March 4, a US District Judge denied Elon Musk's lawsuit for an injunction that would immediately suspend OpenAI's transformation into a commercial organization. Instead, Musk's request for a ban on restructuring the ChatGPT maker is set for expedited trial this fall.
Bloomberg writes about it.
What is known about the decision of the judge
In her order, US District Judge Yvonne Gonzalez Rogers noted that she wanted to resolve Musk's claims quickly, given the public interest at stake. She also took into account the potential harm if the company is converted in violation of the law.
The timing of the case is important, as OpenAI is already negotiating with officials in Delaware and California for permission to convert, a process that is expected to be complicated.
"We’re pleased the court has offered an expedited trial on the core claims driving this case, which in its words present "urgent" issues in the public’s interest," Marc Toberoff, Musk’s lawyer, said in an email.
The court's decision comes shortly after OpenAI rejected Elon Musk's $97.4 billion takeover bid for the company. Sam Altman, OpenAI's CEO, said the bid was an attempt to stop the company's development as it competes with Musk's startup, xAI.
OpenAI welcomed the judge's decision to deny the injunction.
"This has always been about competition. Elon’s own emails show that he wanted to merge a for-profit OpenAI into Tesla. That would have been great for his personal benefit, but not for our mission or US interests," the company's statement reads.
What was the background to the Elon Musk-Sam Altman lawsuit?
Elon Musk filed the first lawsuit in 2024, accusing OpenAI of failing to deliver on the promises Altman made when they co-founded the company in 2015. He argued that the startup had abandoned its charitable purpose by accepting billions of dollars in investments from Microsoft since 2019, a year after Musk left OpenAI's board.
The US Federal Trade Commission has raised concerns about Microsoft's $13 billion investment in OpenAI, saying the tech giant could extend its dominance in cloud computing to the fast-growing artificial intelligence market.
Now, Japanese investment firm SoftBank Group Corp. is negotiating to invest tens of billions of dollars in OpenAI, which could dwarf all other investments and make it the startup's biggest backer. At the same time, OpenAI is negotiating with investors to get a valuation of $300 billion.
To recap, Elon Musk and a group of investors made a $97.4 billion offer to acquire the organization that controls OpenAI. This offer is part of the ongoing battle between the billionaire and the CEO of the AI startup, Sam Altman.
Earlier, OpenAI accused China's DeepSeek of using its technology to train its model. At the same time, netizens point out that the American company has repeatedly faced claims of copyright infringement.