OAKLAND, USA — A federal judge suggested Tuesday, February 4, 2025, that Elon Musk’s attempt to block OpenAI’s restructuring is unlikely to succeed.
This marks the latest development in a high-stakes legal battle between the billionaire tech mogul and OpenAI CEO Sam Altman.
During a hearing in U.S. District Court in Oakland, California, Judge Yvonne Gonzalez Rogers appeared skeptical of Musk’s request for a preliminary injunction that would stall OpenAI’s transition to a public benefit corporation (PBC)—a for-profit entity that still aims to prioritize societal impact.
“It is a stretch [for Musk] to claim irreparable harm in this case,” Gonzalez Rogers said in court, framing the dispute as “billionaires versus billionaires.”
Musk’s Fight Against OpenAI’s For-Profit Shift
Musk, who co-founded OpenAI in 2015 but left the organization in 2018, has accused Altman and the company’s leadership of abandoning its original mission of developing open-source artificial intelligence for the benefit of humanity.
His lawsuit alleges that OpenAI, backed by Microsoft, has turned into a “closed-source, profit-maximizing” entity that violates its founding agreements.
His legal team claims that OpenAI’s new corporate structure, which allows for massive outside investment, is a betrayal of its nonprofit roots.
OpenAI, which started as a nonprofit research lab, transitioned to a capped-profit model in 2019 to attract investors.
The company announced plans in December 2024 to transition to a public benefit corporation—a move that Musk says gives Microsoft undue influence over the future of AI.
Judge Suggests Case Should Go to Trial
While Gonzalez Rogers did not immediately rule on Musk’s injunction request, she questioned the urgency of his claims, indicating that the matter could be resolved at trial rather than through a preliminary ruling.
“I don’t know what happened, but I certainly am not throwing something out on a motion to dismiss when it is plausible that what Mr. Musk is saying is true,” she said.
“We’ll find out, he’ll sit on the stand, he’ll present it to a jury. A jury will decide who is right. So something’s going to trial.”
Musk’s Monopoly Claims Against Microsoft and OpenAI
Musk’s legal team has accused OpenAI and Microsoft of anti-competitive behaviour, alleging that their partnership is designed to suppress competition in the AI industry.
His attorneys argue that Microsoft’s influence over OpenAI—bolstered by a multibillion-dollar investment—violates the Sherman Antitrust Act by creating a monopoly-like environment that hinders competition.
“When you look at that, it’s a cumulative effect in a nascent industry where OpenAI—already with 70% of the market, in conjunction with Microsoft—is seeking to strangle their competitors in the crib,” Musk’s attorney Marc Toberoff told the court.
OpenAI’s legal team denied the existence of any improper agreements, arguing that Musk’s lawsuit misrepresents the company’s evolution.
OpenAI Defends Its For-Profit Transition
OpenAI’s attorney Sarah Eddy argued that Musk was aware of and even supported OpenAI’s transition to a for-profit model before his departure.
“It would be economically irrational for investors to invest only in OpenAI, even if that were happening,” Eddy told the judge.
“There are plenty of reasons … for investors to be selecting one investment vehicle rather than the other.”
OpenAI has previously released emails purportedly sent by Musk in late 2017, in which he allegedly supported the creation of a for-profit entity to secure the billions of dollars needed to compete in AI development.
In one of the emails, Musk allegedly wrote to Altman and other OpenAI leaders:
“Even raising several hundred million won’t be enough. This needs billions per year immediately or forget it.”
Musk has not publicly addressed the authenticity of these emails.
AI Competition Heats Up Amid Policy Shifts
The lawsuit plays out as the U.S. government under President Donald Trump is making major moves in AI policy.
Last month, Altman met with Trump at the White House, where Trump announced a $500 billion AI infrastructure initiative, dubbed “Stargate”, aimed at bolstering U.S. dominance in AI.
Musk, meanwhile, has launched his own AI venture, xAI, which he added as a plaintiff in the case against OpenAI.
xAI is positioning itself as a direct competitor to OpenAI, developing AI models that Musk claims will be more transparent and ethical.
Next Steps in the Legal Battle
While Gonzalez Rogers did not dismiss Musk’s claims outright, her comments signal that an immediate ruling against OpenAI is unlikely.
Instead, the case appears poised to move toward a full trial, where Musk and Altman could face off in a legal showdown over the future of AI.
For now, OpenAI’s restructuring efforts remain on track, and its legal team is confident that the company’s transformation will withstand Musk’s challenges.
“We remain focused on our mission to develop AI that benefits humanity,” OpenAI said in a statement following the hearing. “This lawsuit will not deter us from that goal.”
