In November, Elon Musk asked federal court to block Openai's plans to transform from a nonprofit into a purely for-profit company.
On Tuesday, a federal judge in San Francisco denied Musk's request, calling it “extraordinary.” However, the court has allowed Musk to proceed with other aspects of the lawsuit filed against Openai and its CEO Sam Altman last year.
Musk helped create Openai as a nonprofit organization in 2015, along with Altman and others. In 2018, Musk left the organization after a fight for control of the company. Altman then attached Openai to a commercial company, allowing him to raise the billions of dollars needed to build artificial intelligence technology.
However, the nonprofit maintained control of the company. Last year, Altman and his company began working on a plan to shift the management of the company from a nonprofit to an for-profit company to Openai investors.
Shortly afterwards, Musk filed a lawsuit against Openai and Altman, alleging that he violated the company's incorporation agreement by outweighing commercial interests than public interest.
Musk then expanded his complaints to include allegations that Open violated the Antimonopoly Act by asking investors to agree not to invest in rival companies, including Musk's new artificial intelligence company Xai.
“We welcome the court's decision,” Openai spokesperson Lindsey said in a statement. “Elon's own email shows that he wants to fuse the for-profit Openai with Tesla. It was great for his personal interests, but not for our mission or ours.”
Earlier this year, Musk and the investor consortium escalated a long-standing feud with Altman by offering to buy assets from a nonprofit that manages the opening for more than $97 billion. Openai's board later declined the bid.
However, the bid could complicate Altman's efforts to separate Altman's company from the nonprofit committee and raise the billions needed for Openai to build new technology.
“The court is pleased to have offered a prompt trial on the core claim that promotes this case, which, in its terms, presents a 'urgent' issue in the interest of the public,” Mark Toberov, a lawyer representing Musk, said in a statement in the New York Times.
(The New York Times sued Openai and its partner Microsoft, accusing them of copyright infringement over news content related to AI Systems. Openai and Microsoft denied these claims.)
