Musk may still have a chance to thwart OpenAI’s for-profit conversion
This week, Elon Musk lost the last battle in his lawsuit against OpenAi, but a federal judge seems to have given Musk and others who oppose the conversion of OpenAi reasons to be hopeful.
Musk’s lawsuit against OpenAi, who also mentions Microsoft and OpenAi CEO Sam Altman as defendants, accuses OpenAI of leaving his non -profit mission to ensure that the AI examination benefits all humanity. OpenAi was founded as a non-profit organization in 2015, but was converted in 2019 into a structure “DOP win lot” and is now trying to restructure again in a general interest company.
Musk had sought a provisional order to stop the transition from OpenAi to a profit motive. On Tuesday, a federal judge in North California, judge Yvonne Gonzalez Rogers of the American court, denied Musk’s request – but only made a few jurisprudential concerns about the planned conversion of OpenAi.
Judge Rogers said in her ruling that denied that “significant and irreparable damage is done” when the money of the public is used to finance the conversion of a non-profit in a profit motive. The non-profit organization of OpenAi currently has a majority stake in OpenAI’s for-profit activities, and it is said that it is to receive billions of dollars in compensation as part of the transition.
Judge Rogers also noted that various co-founders of OpenAI, including Altman and President Greg Brockman, have done ‘fundamental obligations’ to not use OpenAi ‘as a vehicle to enrich themselves’. In her ruling, Judge Rogers said that the court is willing to offer an accelerated trial in the fall of 2025 to resolve the disputes of the corporate restructuring.
Marc Toberoff, a lawyer who represents Musk, told WAN that the legal team of Musk is satisfied with the decision of the judge and is planning to accept the offer for an accelerated trial. OpenAi did not say whether it will also accept and did not respond immediately to WAN’s request for comment.
The comments from judge Rogers about OpenAi’s for-profit conversion are not exactly good news for the company.
Tyler Whitmer, a lawyer who represents ENCODE, a non-profit who has submitted an Amicus assignment in the case that claims that the conversion of OpenAi could endanger the AI safety, WAN said that the decision of judge Rogers a “cloud” of the director of the open place. Attorden -General in California and Delaware are already investigating the transition, and the concerns that Judge Rogers raised can encourage them to investigate more aggressively, Whitmer said.
There were a few victories for OpenAi in the ruling of Judge Rogers.
The legal team of Musk presented to show that OpenAI has violated a contract when accepting around $ 44 million in Musk donations and then stepped to convert to a profit motive, was “insufficient for the high burden needed for a provisional order,” said Judge Rogers. In her ruling, the judge pointed out that some e-mails that were submitted as exhibitions showed Musk themselves, since OpenAi could ever become a company with a profit motive.
Judge Rogers also said that the AI company of Musk, Xai, a claimant in the case, did not demonstrate that the “irreparable damage” would suffer if the conversion of profit motive was not imposed. Judge Rogers was also not convinced by the claimants’ arguments that the close employee and investor of OpenAi, Microsoft, would violate interlocking directorate Laws and that Musk is under a Californian provision that prohibits self -handling.
Musk, once an important proponent of OpenAi, has positioned himself as one of the greatest opponents of the company. Xai competes directly with OpenAI in the development of frontier AI models, and Musk and Altman are now becoming jockeying for legal and political power under a new presidential administration.
The deployment is high for OpenAi. The company is said to be able to complete its for-profit conversion by 2026, or a part of the Capital OpenAi that was recently collected, could Convert to debts.
At least one former OpenAi employee is afraid of the implications for AI -Governance, should successfully complete his transition. Speaking with WAN about the state of anonymity to protect their future vacancies, the former employee said they believe that the conversion of the startup could threaten public safety.
Part of the motivation behind the non -profit structure of OpenAi was to ensure that profit motives do not overwrite its mission: ensuring that AI research benefits all humanity. However, if OpenAI becomes a traditional company with a profit motive, there can be little to prevent it from giving a priority to profit, the former employee told WAN.
The former employee added that the non-profit structure of OpenAi was one of the main reasons that they came to the organization.
Only a few months from now on it has to be clearer how many obstacles OpenAI will have to overcome in the transition with profit motive. Regulators, AI Safety Advocates and Tech Investors will look with great interest.
