A federal judge in California has denied Elon Musk’s efforts to halt OpenAI’s transformation into a for-profit entity, paving the way for other aspects of his lawsuit against the artificial intelligence startup.
Musk had previously offered $97.4 billion to buy OpenAI, but said he would withdraw the bid if the company stopped its conversion to a for-profit structure. However, the court ruled that Musk failed to meet the burden of proof for the extraordinary relief requested.
Other aspects of Musk’s lawsuit against OpenAI can proceed, including claims that Microsoft and OpenAI allegedly conspired to restrict investments in rival companies. The case has been ongoing since March 2024, when Musk sued OpenAI for breach of contract and fiduciary duty.
OpenAI was initially created as a nonprofit AI research lab in 2015, but it has been commercializing products, including its popular ChatGPT chatbot. Musk has become one of the company’s main adversaries, leading to a significant escalation in the legal feud.
The court’s ruling allows OpenAI to move forward with plans to create a public benefit corporation to oversee its commercial operations, potentially removing some nonprofit restrictions and allowing it to function more like a high-growth startup.
Source: https://www.cnbc.com/2025/03/04/judge-denies-musk-attempt-to-block-openai-from-becoming-for-profit-.html