Judge Says Elon Musk's Claims of Harm from OpenAI Are A 'stretch'.

OAKLAND, Calif. (AP) - Elon Musk's lawyers faced off with OpenAI in court Tuesday as a federal judge weighed the billionaire's ask for a court order that would block 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 damaged if she doesn't step in to stop OpenAI from progressing with its transition from a nonprofit research study lab to a for-profit corporation.

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

"It is possible that what Mr. Musk is stating holds true. We ´ ll learn. He ´ ll sit on the stand," she said.

Musk, an early OpenAI financier and board member, took legal action against the expert system business in 2015, initially in a California state court and later in federal court, alleging it had betrayed its founding aims as a nonprofit research lab benefiting the general public excellent. Musk had invested about $45 million in the startup from its starting until 2018, his legal representative said Tuesday.

Musk escalated the legal conflict late in 2015, including new claims and accuseds and asking for a court order that would stop OpenAI ´ s prepares to convert itself into a for-profit business more totally. Musk also added his own AI company, xAI, as a plaintiff.

Also targeted by Musk's claim is OpenAI's close service 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 authorizing the sort of initial injunction that Musk wants but hasn't yet ruled on the request. She did state she had "significant concerns" with 2 people linked to Microsoft on OpenAI's board - Hoffman and long time Microsoft executive Deanna Templeton, who was a "non-voting observer."

"So you desire me to think that she was sitting there listening to all the discussions and not informing any person? 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 must not be there," she said.

Hoffman, a co-founder of LinkedIn, has been on Microsoft ´ s board considering that quickly after the tech huge purchased the job networking site. He stepped down from OpenAI's board in 2023 to avoid conflicts with his AI startup, Inflection.

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

The judge has managed a number of tech market cases including Apple's fight with Epic Games, though she said Tuesday that Musk's case is "absolutely nothing like" that a person. That case was also the last time she granted an initial injunction, in 2020, 8 months before the case went to trial.

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

Tuesday's hearing was initially set for January but was delayed after Musk's attorney Marc Toberoff said his house was destroyed in the Pacific Palisades wildfire.

Musk, who did not go to the hearing, has actually declared in the claim that the business are breaching the regards to his foundational contributions to the charity. Judge Gonzalez Rogers called it a "stretch" to claim "irreversible damage" to Musk, and called the case "billionaires vs. billionaires." She questioned why Musk invested tens of millions in OpenAI without a composed agreement. Toberoff said it was because the relationship in between Altman and Musk at the time was "built on trust" and the 2 were extremely close.

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

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

At the heart of the dispute is a 2017 internal power struggle at the fledgling start-up that caused Altman ending up being OpenAI ´ s CEO

. Emails disclosed by OpenAI reveal Musk had actually likewise sought to be CEO and grew disappointed after two other OpenAI co-founders said he would hold too much power as a significant shareholder and president if the start-up was successful in its objective to attain better-than-human AI called synthetic basic intelligence, or AGI. Musk has actually long voiced issues about how innovative forms of AI might threaten mankind.

Altman ultimately prospered in becoming CEO and has actually remained so except for a duration in 2023 when he was fired and after that restored days later on after the board that ousted him was changed.

OpenAI has sought to show Musk ´ s early assistance for the idea of making OpenAI a for-profit organization so it could raise cash for the hardware and computer system power that AI needs.

Musk is not the only one difficult OpenAI's for-profit transition. Facebook and Instagram moms and machinform.com dad Meta Platforms has asked California's lawyer general to block it, and the workplace of Delaware's attorney general has said it is evaluating the conversion.

It was unclear Tuesday when the case might go to trial. Musk's legal representatives at first said they would be all set by June after some back-and-forth with the two sides the judge showed it probably will not be till June 2026 at the earliest, bybio.co however likely early 2027.