Elon Musk lost his latest fight this week in a lawsuit against the Open, but a federal judge appears to have given Musk reasons to oppose the conversion of the open’s for-profit organizations reason to pose hope.
Musk’s lawsuit against Openai, which named Microsoft and Openai CEO Sam Altman as the accused, accusing him of abandoning his non-profit mission to ensure that AI research benefits all humanity. Openai was founded as a nonprofit in 2015, but in 2019 it was converted into a “capped for-profit” structure and is now about to rebuild it into a public benefits company.
Musk had sought a preliminary injunction to halt the transition to for-profit organizations. On Tuesday, U.S. District Judge Yvonne Gonzalez Rogers, a federal judge in Northern California, denied the mask request but expressed jurisdictional concerns about the open’s planned conversion.
Judge Rogers said in her ruling denying an injunction that “serious and irreparable harm will occur” if public money is used to fund the nonprofit’s conversion to profit. Openai’s nonprofit organization currently acquires a majority stake in Openai’s commercial operations and is reportedly receiving billions of dollars in compensation as part of the transition.
Judge Rogers also said several Open co-founders, including Altman and President Greg Brockman, had prevented Openai from using “basic commitment” “as a means to enrich ourselves.” In her ruling, Judge Rogers said the court is ready to offer a swift trial in the fall of 2025.
Marc Toberoff, the lawyer representing Musk, told TechCrunch that Musk’s legal team is happy with the judge’s decision and intends to accept a prompt trial offer. Openai was also accepted by TechCrunch’s request for comment, and did not say whether they did not respond immediately.
Judge Rogers’ comments on the conversion of Openai’s for-profit organization are not exactly good news for the company.
Encode’s representative lawyer Tyler Whitmer, the nonprofit that filed Amicus Brief claiming that conversion of Openai’s for-profit could put AI safety at risk, told TechCrunch that Judge Rogers’ decision would place an “cloud” of Openai’s regulatory uncertainty on Openai’s board. California and Delaware attorneys generals are already investigating the transition, and the concerns raised by Rogers could burn them to investigate them more proactively, Whitmer said.
Judge Rogers’ ruling saw several victories over Open Alley.
The evidence presented by Musk’s legal team to demonstrate that Open had breached the contract by accepting about $44 million in donations from Mask and then taking steps to convert to a for-profit organization “is not enough for the high burdens required for a provisional injunction,” Judge Rogers found. The judge noted that in her ruling, some emails submitted as exhibits were shown by Musk herself considering that the opening could one day become a for-profit organization.
Judge Rodgers also said that Mask’s AI company Xai was the plaintiff in the case and failed to show that he suffered “irreparable harm.” Judge Rogers was also not accused of the plaintiffs that Microsoft, a close collaborator and investor, violated the laws of the linked bureau, and that Musk was standing under California provisions that prohibit self-dealing.
Once a major supporter of Openai, Musk has positioned himself as one of the company’s great enemies. Zai competes directly with Openai in developing the frontier AI model, with Musk and Altman currently jocking for legal and political power under the new presidential administration.
Openai’s interests are high. The company is reportedly required to complete commercial conversions by 2026. Alternatively, some of the recently raised capital Openai could convert to debt.
At least one former Openai employee fears the impact on AI governance. Speaking to TechCrunch on condition of anonymity to protect future work prospects, the former employee said they believe the conversion of startups could threaten public safety.
Part of the motivation behind Openai’s non-profit structure was to ensure that profit motives do not negate its mission. We guarantee that AI research benefits all humanity. However, if Openai becomes a traditional for-profit company, it may rarely stop profits prioritizing everything, the former employee told TechCrunch.
The former employee added that Openai’s non-profit structure was one of the main reasons why it joined the organization.
Just a few months later, the number of hurdles Openai must overcome in its commercial transition should become clear. Regulators, AI safety advocates, and tech investors are looking with great interest.
Source link
