OAKLAND, California, March 15 (Reuters) – OpenAI and Elon Musk have agreed to an expedited trial over the artificial intelligence company’s shift to a for-profit model, intensifying the legal battle between Musk and OpenAI CEO Sam Altman.
Fast-Tracked Legal Battle
A joint proposal filed in U.S. District Court for the Northern District of California on Friday confirms that both parties have agreed to accelerate proceedings, with a trial set for this autumn. The decision on whether the case will be judged by a jury or solely by a judge has been postponed.
Earlier this month, the judge denied Musk’s request to pause OpenAI’s transition to a for-profit model but granted the request for an expedited trial. OpenAI welcomed the ruling, stating in a blog post on Friday:
“We welcome the court’s March 4 decision rejecting Elon Musk’s latest attempt to slow down OpenAI for his personal benefit.”
Musk vs. OpenAI: A History of Disputes
Musk, who co-founded OpenAI in 2015, left before the company surged in prominence. He later founded a competing AI startup, xAI, in 2023. In 2023, Musk sued OpenAI and Sam Altman, alleging that the company had strayed from its original mission to develop AI for the good of humanity rather than for corporate profits.
OpenAI and Altman deny the allegations, arguing that Musk is attempting to stifle a competitor.
The Stakes: OpenAI’s For-Profit Model
The lawsuit centers around OpenAI’s shift from a nonprofit to a for-profit model, which OpenAI claims is essential for securing the massive capital investment needed to remain competitive in the AI sector.
- OpenAI’s most recent fundraising round secured $6.6 billion in investment.
- The company is reportedly in discussions for a $40 billion investment from SoftBank Group (9984.T), contingent on restructuring efforts that would remove the nonprofit’s control.
Musk’s Takeover Bid Rejected
Just weeks before Friday’s court filing, Altman rejected a $97.4 billion unsolicited takeover bid from a Musk-led group, responding with a firm “no thank you”.
As OpenAI pushes forward with its fundraising and restructuring efforts, the outcome of this lawsuit could shape the future of AI development and corporate governance in the sector.
For more updates on the legal battle, visit Reuters.
