If Musk loses the legal battle, his own AI startup, valued at $50 billion, may struggle to compete with OpenAI in capital raising efforts.
OpenAI contends Musk's legal actions could harm its business operations and argue that his claims are unfounded.
Judge Gonzalez Rogers challenged Musk's attorney on the claim of 'irreparable harm,' highlighting Musk's significant fundraising efforts for xAI, which totaled $11 billion.
The stakes are high for OpenAI, as its recent $6.6 billion fundraising and a potential $25 billion investment from SoftBank hinge on the company's restructuring.
Elon Musk and Sam Altman faced off in a California courtroom on February 4, 2025, regarding Musk's lawsuit against OpenAI's transition to a for-profit model.
Musk argues that OpenAI's shift to a for-profit model contradicts its original mission to develop AI for the benefit of humanity.
Initiated in 2022, Musk's lawsuit accuses OpenAI of betraying its nonprofit goals and includes Microsoft and Reid Hoffman as defendants.
Musk is seeking a preliminary injunction to halt OpenAI's conversion to a for-profit entity, which the judge labeled as 'extraordinary' and 'rarely granted.'
U.S. District Judge Yvonne Gonzalez Rogers expressed skepticism about Musk's claims of irreparable harm from OpenAI's changes, calling it a 'stretch.'
Musk's amended lawsuit claims that Altman betrayed OpenAI's founding mission of safety and openness for humanity's benefit, prioritizing shareholder value instead.
The judge raised concerns over OpenAI's relationship with Microsoft and the presence of Microsoft executives on OpenAI's board, signaling potential conflicts of interest.
Musk's lawsuit accuses OpenAI and Microsoft of civil racketeering and fraud, alleging that they have violated antitrust laws by discouraging investors from supporting Musk's own AI venture, xAI.
