CALIFORNIA, US – A U.S. judge on Tuesday denied Elon Musk’s request to block OpenAI from transitioning into a for-profit company, dealing a legal setback to the billionaire as his feud with OpenAI CEO Sam Altman intensifies.
U.S. District Court Judge Yvonne Gonzalez Rogers ruled that Musk and his AI startup, xAI, failed to demonstrate an urgent need for an injunction while the lawsuit proceeds to trial.
The ruling clears the way for OpenAI to continue operating under its hybrid structure, with a for-profit subsidiary supporting its nonprofit research arm.
Musk, who co-founded OpenAI in 2015, sued the company in California federal court earlier this year, claiming it had strayed from its original nonprofit mission.
He alleged that OpenAI’s leadership misled him into providing financial support under the assumption that the company would never seek to monetize its artificial intelligence models.
“Whether Musk’s emails and social media posts constitute a writing sufficient to constitute an actual contract or charitable trust between the parties is debatable,” Judge Rogers wrote in her decision.
While denying the injunction, the judge signaled a willingness to fast-track the trial on Musk’s claims, potentially setting up a high-stakes legal battle later this year.
Musk has been an outspoken critic of OpenAI’s direction under Altman, particularly as it deepens its ties with Microsoft and accelerates commercial AI development.
His lawsuit came after OpenAI’s board rejected a Musk-led offer to acquire the company for $97.4 billion in February.
“OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition,” OpenAI Board Chair Bret Taylor said in a statement.
Musk left OpenAI in 2018, with the company citing a growing conflict of interest as Tesla advanced its own AI research.
In 2023, Musk launched his own AI venture, xAI, as a direct rival to OpenAI.
