Judge Says Elon Musk s Claims Of Harm From OpenAI Are A stretch .

OAKLAND, Calif. (AP) - Elon Musk's attorneys took on with OpenAI in court Tuesday as a federal judge weighed the billionaire's demand for a court order that would obstruct the ChatGPT maker from transforming itself to a for-profit company.


U.S. District Judge Yvonne Gonzalez Rogers said it was a "stretch" for Musk to claim he will be irreparably harmed if she doesn't intervene to stop OpenAI from moving on with its shift from a not-for-profit lab to a for-profit corporation.


But the judge likewise raised issues about OpenAI and its relationship with business partner Microsoft and said she wouldn't stop the case from relocating to trial as quickly as next year so a jury can decide.


"It is plausible that what Mr. Musk is stating holds true. We ´ ll discover. He ´ ll rest on the stand," she said.


Musk, an early OpenAI financier and board member, took legal action against the expert system company in 2015, initially in a California state court and later on in federal court, alleging it had actually betrayed its founding aims as a not-for-profit research lab benefiting the general public excellent. Musk had actually invested about $45 million in the startup from its founding till 2018, his lawyer said Tuesday.


Musk escalated the legal disagreement late last year, including brand-new claims and accuseds and asking for a court order that would stop OpenAI ´ s prepares to transform itself into a for-profit company more totally. Musk likewise added his own AI company, xAI, as a plaintiff.


Also targeted by Musk's claim is OpenAI's close company partner Microsoft and tech entrepreneur Reid Hoffman, a former OpenAI board member who likewise rests on Microsoft's board.


Gonzalez Rogers said she has a high bar for approving the type of preliminary injunction that Musk wants but hasn't yet ruled on the request. She did say she had "substantial concerns" with 2 people linked to Microsoft on OpenAI's board - Hoffman and longtime Microsoft executive Deanna Templeton, who was a "non-voting observer."


"So you want me to believe that she was sitting there listening to all the conversations and not informing anyone? What would the point be for her to sit there and listen to everybody, if not to interact what she was listening? There would be no point for her to be there, which is why she actually ought to not be there," she said.


Hoffman, a co-founder of LinkedIn, has actually been on Microsoft ´ s board since shortly after the tech giant purchased the job networking website. He stepped down from OpenAI's board in 2023 to prevent disputes with his AI startup, Inflection.


Templeton, who Musk also named as an offender, was added as a non-voting member of OpenAI ´ s board in the consequences of Altman ´ s ouster after Microsoft CEO Satya Nadella sought more stability on the board. But months later, she was dropped from the OpenAI board as U.S. antitrust enforcers were revealing concerns about such arrangements on corporate boards.


The judge has actually handled a number of tech industry cases consisting of Apple's battle with Epic Games, though she said Tuesday that Musk's case is "nothing like" that a person. That case was likewise the last time she approved an initial injunction, in 2020, eight months before the case went to trial.


Then-President Barack Obama selected Gonzalez Rogers to the federal bench in 2011.


Tuesday's hearing was originally set for January but was postponed after Musk's lawyer Marc Toberoff said his home was ruined in the Pacific Palisades wildfire.


Musk, who did not attend the hearing, has alleged in the claim that the business are violating the terms of his foundational contributions to the charity. Judge Gonzalez Rogers called it a "stretch" to claim "permanent damage" to Musk, and called the case "billionaires vs. billionaires." She why Musk invested tens of millions in OpenAI without a composed contract. Toberoff said it was since the relationship in between Altman and Musk at the time was "constructed on trust" and the 2 were really close.


"That is just a lot of money" to invest "on a handshake," the judge said.


OpenAI has said Musk ´ s asked for court order would "debilitate OpenAI ´ s service"and objective to the benefit of Musk and his own AI company and is based upon "far-fetched" legal claims.


At the heart of the disagreement is a 2017 internal power struggle at the new startup that resulted in Altman ending up being OpenAI ´ s CEO


. Emails disclosed by OpenAI reveal Musk had actually likewise looked for to be CEO and grew frustrated after 2 other OpenAI co-founders said he would hold too much power as a major investor and primary executive if the startup was successful in its objective to attain better-than-human AI referred to as artificial basic intelligence, animeportal.cl or AGI. Musk has long voiced issues about how innovative forms of AI might threaten mankind.


Altman eventually prospered in becoming CEO and has remained so other than for a period in 2023 when he was fired and after that reinstated days later on after the board that ousted him was changed.


OpenAI has actually looked for to demonstrate Musk ´ s early support for the concept of making OpenAI a for-profit service so it might raise money for the hardware and computer power that AI needs.


Musk is not the only one challenging OpenAI's for-profit shift. Facebook and Instagram parent Meta Platforms has actually asked California's chief law officer to block it, and the office of Delaware's lawyer general has said it is evaluating the conversion.


It was not clear Tuesday when the case may go to trial. Musk's attorneys at first said they would be prepared by June after some back-and-forth with the two sides the judge indicated it most likely won't be up until June 2026 at the earliest, but likely early 2027.


O'Brien reported from Providence, Rhode Island.


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