Musk is trying to block Openai’s transition to “for-profit.” A judge just put it very difficult

Sam Altman wants to make Openai a company with profit (“for-profit”), but the process was notably complicated when Musk offered to buy it for 97.4 billion dollars. The tycoon did not stop there and He also tried to sue A Openai to try to block that transition to For-Profit, but just lost that legal battle.

What happened. A federal judge in California has blocked Musk’s legal effort to stop Openai’s transformation to an entity of profit. As indicated In BloombergJudge Yvonne Gonzalez Rogers determined that the lawsuit “have not satisfied the probative charge” that would have needed for that demand to prosper.

A case that was entangled. In March 2024 Musk He sued Openai for violating their contracts and fiduciary duties. The case He retired of the State Court and was activated in the Federal Court, and that was when Musk expanded the demand indicating that Microsoft and Openai had violated antitrust laws. Openai defended himself from these allegations publishing internal messages of the billionaire, and now the federal judge has made it clear that the evidence and arguments presented by Musk are not enough to avoid that transition sought by Altman.

But not everything is lost. The demand contained other Musk requests with respect to OpenAI, although it is not detailed which. Even so, the judge has indicated that these other components of the lawsuit may remain active in the legal process.

Sam Altman has it easier now. The Openai Directorate Council declared a few weeks ago that “the hundreds of billions of dollars that large companies are now investing in the development of AI show what is really needed so that Openai continues to pursue the mission.” With the Form-Profit structure, the company can avoid the limitations of investments in your company. Thus, Openai will be able to eliminate that benefit to investors, which can attract even more money for the company.

Quick judgment. Rogers added in his sentence that Musk’s complaints are resolved as soon as possible “the public interest in play and potential damage if a transition contrary to the law occurs.” Thus, the judge indicated that he will hold an accelerated trial focusing on the main demand that the Openai conversion plan is illegal and “potentially the interrelated demands based on contracts”.

The war between Musk and Altman continues. Openai’s lawyers stood out as Musk’s demand is basically a demand for the competition with the company. “Elon’s own emails,” they explained, “they show that they wanted to merge an openai with profit with Tesla. That would have been great for their personal benefit, but not for our mission or the interests of the US.”

Image | Ted | Techcrunch

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