Court Rejects Musk’s Bid to Block OpenAI’s Commercialization

US District Judge Yvonne Gonzalez Rogers has dismissed Elon Musk’s request to prevent OpenAI’s transformation into a commercial entity, according to Bloomberg.

The entrepreneur failed to provide sufficient evidence to warrant a ban, the court stated. However, Rogers is prepared to conduct an expedited trial based on claims of the illegality of OpenAI’s restructuring plan.

“Irreparable harm occurs when public funds are used to finance the transformation of a non-profit into a commercial entity,” the judge noted.

The timing of the case is crucial for OpenAI, as the startup is already in discussions with the California Attorney General’s office regarding changes to its corporate structure.

“We are pleased that the court has proposed an expedited review of the main claims in this case, which it described as ‘urgent’ issues in the public interest,” commented Musk’s lawyer, Mark Toberoff.

Previously, a group of investors led by a billionaire offered to buy OpenAI for $97.4 billion. Sam Altman’s startup declined.

“I would like him to just compete by creating a good product. But it seems Musk is using many tactics and resorting to lawsuits, and now this. We will just try to ignore such things and continue our work,” he commented.

OpenAI welcomed the judge’s decision.

“It has always been about competition. Musk’s own emails show he wanted to merge commercial OpenAI with Tesla. That would have been great for his personal gain, but not for our mission or the interests of the US,” the statement said.

Back in August 2024, Musk resumed legal action against OpenAI. The lawsuit claims that the AI startup and its two founders—Altman and Greg Brockman—violated the company’s founding agreement by prioritizing commercial interests over the public good.