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

OAKLAND, Calif. (AP) - Elon Musk's legal representatives faced off 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 business.

U.S. District Judge Yvonne Gonzalez Rogers said it was a "stretch" for Musk to claim he will be irreparably damaged if she does not step in to stop OpenAI from moving forward with its shift from a nonprofit lab to a for-profit corporation.

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

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

Musk, an early OpenAI investor and board member, took legal action against the expert system business last year, first in a California state court and later in federal court, alleging it had actually betrayed its starting aims as a not-for-profit research study lab benefiting the general public good. Musk had invested about $45 million in the start-up from its founding until 2018, his lawyer said Tuesday.

Musk intensified the legal dispute late last year, adding new claims and defendants and requesting a court order that would stop OpenAI ´ s plans to convert itself into a for-profit company more completely. Musk likewise added his own AI business, xAI, as a plaintiff.

Also targeted by Musk's claim is OpenAI's close company partner Microsoft and tech business owner Reid Hoffman, a previous OpenAI board member who also rests on Microsoft's board.

Gonzalez Rogers said she has a high bar for authorizing the sort of initial injunction that Musk desires but hasn't yet ruled on the request. She did state she had "considerable concerns" with two individuals 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 think that she was sitting there listening to all the conversations and not informing any person? What would the point be for her to sit there and listen to everyone, if not to interact what she was listening? There would be no point for her to be there, which is why she really needs to not exist," she said.

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

Templeton, who Musk likewise called as a defendant, was added as a non-voting member of OpenAI ´ s board in the consequences of Altman ´ s ouster after Microsoft CEO Satya Nadella looked for 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 plans on corporate boards.

The judge has actually dealt with a variety of tech market cases consisting of Apple's fight with Epic Games, though she said Tuesday that Musk's case is "nothing like" that one. That case was also the last time she approved a preliminary 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 originally set for January however was postponed after Musk's attorney Marc Toberoff said his house was damaged in the Pacific Palisades wildfire.

Musk, historydb.date who did not participate in the hearing, has actually alleged in the claim that the companies are breaking the regards to his fundamental 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 10s of millions in OpenAI without a written contract. Toberoff said it was since the relationship in between Altman and Musk at the time was "constructed on trust" and the 2 were extremely close.

"That is just a great deal of cash" to invest "on a handshake," the judge said.

OpenAI has said Musk ´ s requested court order would "cripple OpenAI ´ s business"and mission to the advantage of Musk and his own AI company and is based upon "far-fetched" legal claims.

At the heart of the conflict is a 2017 internal power battle at the recently established start-up that caused Altman ending up being OpenAI ´ s CEO

. Emails divulged by OpenAI reveal Musk had actually also looked for to be CEO and grew annoyed after 2 other OpenAI co-founders said he would hold too much power as a major investor and chief executive if the startup was successful in its goal to attain better-than-human AI known as artificial basic intelligence, or AGI. Musk has long voiced concerns about how innovative forms of AI might threaten humanity.

Altman eventually succeeded in becoming CEO and has actually remained so other than for a duration in 2023 when he was fired and then restored days later after the board that ousted him was changed.

OpenAI has looked for to demonstrate Musk ´ s early support for the idea of making OpenAI a for-profit organization so it could raise money for the hardware and computer system power that AI requires.

Musk is not the only one tough OpenAI's for-profit transition. Facebook and Instagram moms and dad Meta Platforms has asked California's attorney general of the United States to obstruct it, and the office of Delaware's attorney general of the United States has said it is reviewing the conversion.

It was not clear Tuesday when the case might go to trial. Musk's lawyers at first said they would be ready by June after some back-and-forth with the 2 sides the judge suggested it most likely won't be up until June 2026 at the earliest, but likely early 2027.