Elon Musk’s legal battle with ChatGPT-maker OpenAI escalated on Tuesday, February 4 as his lawyers faced off with the company in federal court. Musk, an early investor and former board member of OpenAI, is seeking a court order to halt the organization’s transition from a nonprofit research lab to a for-profit corporation. During the hearing, U.S. District Judge Yvonne Gonzalez Rogers expressed skepticism about Musk’s claim that he would suffer “irreparable harm” if OpenAI’s transition proceeds, reports AP.
Judge Rogers called it a “stretch” to claim “irreparable harm” to Musk, and called the case “billionaires vs. billionaires.” She further added, “It is plausible that what Mr. Musk is saying is true. We’ll find out. He’ll sit on the stand.”
Elon Musk’s case against OpenAI
Musk, who invested $45 million in OpenAI between its founding and 2018, has accused the company of abandoning its nonprofit mission to serve the public good. His lawsuit targets OpenAI’s key partner, Microsoft, and tech entrepreneur Reid Hoffman, a former OpenAI board member and current Microsoft board member. Musk’s legal team argues that OpenAI’s shift to a for-profit model contradicts its founding principles.
OpenAI has dismissed the allegations, calling Musk’s claims “far-fetched” and warning that the requested court order would cripple its operations.
Judge questions Microsoft ties
Judge Gonzalez Rogers voiced “significant concerns” about Microsoft’s influence over OpenAI, particularly regarding Deanna Templeton, a Microsoft executive who once served as a non-voting observer on OpenAI’s board. The judge questioned the legitimacy of Templeton’s role, saying, “So you want me to believe that she was sitting there listening to all the discussions and not telling anybody? What would the point be for her to sit there and listen to everybody, if not to communicate what she was listening? There would be no point for her to be there, which is why she actually should not be there.”
Hoffman, a LinkedIn co-founder and longtime Microsoft board member, also faced scrutiny for his dual roles.
The backstory
The dispute traces back to a 2017 power struggle at OpenAI. Musk reportedly sought to become CEO, but co-founders rejected the idea, fearing his dual role as a major investor and chief executive would grant him excessive control. The position ultimately went to Sam Altman, who remains CEO, aside from a brief ouster in 2023.
Musk’s relationship with OpenAI soured further after it introduced a for-profit arm in 2019 to secure funding for the massive computational resources needed to develop artificial general intelligence (AGI). OpenAI has presented internal emails showing Musk initially supported the idea of a for-profit structure, a claim Musk disputes.