A federal judge has denied Elon Musk’s request for a court order to prevent OpenAI from transitioning into a for-profit company. However, she indicated that a trial to examine Musk’s claims against OpenAI and its CEO, Sam Altman, could be expedited.
Judge Yvonne Gonzalez Rogers of the U.S. District Court ruled on Tuesday that Musk had not shown a strong likelihood of success in obtaining a preliminary injunction. She proposed holding a trial as early as this fall, emphasizing the public interest and potential harm if an unlawful conversion were to take place.
Musk, an early backer of OpenAI, launched a lawsuit a year ago, accusing the company and its leadership of breaching their original nonprofit mission. He later expanded the lawsuit, including Microsoft as a defendant and seeking to block OpenAI’s shift to a for-profit model. Additionally, Musk’s AI company, xAI, joined the case, alleging that OpenAI was unfairly limiting competition in the AI industry.
The judge noted that Musk and a group of investors recently made an unsolicited $97.4 billion offer to acquire a controlling stake in the nonprofit. She stated that this action weakened Musk’s argument of “irreparable harm.”
OpenAI expressed approval of the court’s decision.
“This has always been about competition,” the company stated. “Elon’s own emails reveal that he wanted to merge a for-profit OpenAI with Tesla. That would have benefited him personally but not aligned with our mission or U.S. interests.”
Musk’s lawsuit claims that OpenAI and its partners have violated the terms of his initial contributions to the organization. According to his attorney, he invested approximately $45 million in the company from its inception until 2018.
Musk’s attorney, Marc Toberoff, expressed satisfaction with the court’s decision to offer an expedited trial on the key issues in the case.
“We look forward to a jury confirming that Altman accepted Musk’s charitable contributions with the understanding that they were meant for the public’s benefit, not personal gain,” Toberoff stated.
During a hearing last month, Judge Yvonne Gonzalez Rogers questioned the claim that Musk had suffered “irreparable harm,” calling the case a dispute between “billionaires vs. billionaires.” She also asked why Musk invested tens of millions in OpenAI without a formal contract. Toberoff explained that at the time, Musk and Altman had a close relationship built on trust.
“That is just a lot of money to invest on a handshake,” the judge remarked.
The conflict traces back to a 2017 internal power struggle at OpenAI, which ultimately led to Altman becoming CEO.
Emails released by OpenAI reveal that Musk had wanted to take on the CEO role himself. However, two other co-founders opposed the idea, believing it would give him too much control as both a major shareholder and chief executive if the company succeeded in developing artificial general intelligence—AI capable of surpassing human intelligence. Musk has long expressed concerns about the potential dangers of highly advanced AI.
Altman ultimately became CEO and has held the position ever since, except for a brief period in 2023 when he was fired and then reinstated just days later after the board that removed him was replaced.
Judge Yvonne Gonzalez Rogers, appointed in 2011, has presided over several high-profile tech cases, including Apple’s legal battle with Epic Games. However, she stated last month that Musk’s case is “nothing like” that one. The Apple-Epic case was also the last time she granted a preliminary injunction, which happened eight months before it went to trial.