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Judge Rejects Musk’s Bid to Halt OpenAI’s For-Profit Shift

By  |  March 5, 2025

A federal judge has ruled against Elon Musk’s request for a court order preventing OpenAI from converting into a for-profit entity, though she signaled a willingness to fast-track a trial on the matter, according to Reuters.

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    U.S. District Judge Yvonne Gonzalez Rogers issued her decision late Tuesday, stating that Musk failed to demonstrate a “likelihood of success on the merits” in his bid for a preliminary injunction. However, per Reuters, she acknowledged the case’s significance and suggested a trial could take place as early as this fall. She emphasized the “public interest at stake and potential for harm if a conversion contrary to law occurred.”

    Musk, an early backer of OpenAI, has been embroiled in a legal battle with the company and its CEO, Sam Altman, for over a year. According to Reuters, the Tesla and SpaceX chief executive alleges that OpenAI has strayed from its original nonprofit mission, thereby breaching its founding agreements.

    Read more: OpenAI Board Denies Receiving Formal Bid from Elon Musk

    The dispute escalated late last year when Musk expanded his lawsuit to include Microsoft as a defendant and sought a court order to halt OpenAI’s transition to a for-profit structure. Additionally, Musk introduced his AI venture, xAI, as a plaintiff, arguing that OpenAI’s actions were restricting fair competition in the AI sector.

    In a further development, Musk and a group of investors recently made an unsolicited $97.4 billion bid to acquire a controlling interest in OpenAI’s nonprofit arm. Judge Rogers noted that this offer undermined Musk’s assertion of “irreparable harm,” per Reuters.

    Source: Reuters