The feud between Elon Musk and Sam Altman turns into a long legal war

The judge, who monitored the case, rejected this week by giving Musk what he had applied right away: a decision from the court that blocked Openai from converting to a pre-profit business.

“I don’t think you’ve given me a record for the relief you request,” Gonzalez Rogers said, noting that such injunctions are rarely awarded.

But she agreed that Musk’s complaint raised disputed questions about the conditions in his relationship with Openai. His lawyers have claimed that his donations were contingent on Altman’s obligations to operate Openai as a non-profit.

“I don’t know what happened, but I certainly don’t throw anything out at a proposal for rejection when it’s plausible that what Mr. Musk says is true,” Gonzalez Rogers said. “We find out. He sits on the booth. He will present it to a jury. A jury will decide who is right.”

Altman, Openai and its greatest baker Microsoft (MSFT), also called as a defendant in the case, have called Musk’s claims “false” and claimed that he has no legal basis for blocking Openai’s pre-profit conversion.

The essence of the dispute between Musk and Altman is the reason why Musk left Openai in the first place.

Musk claims that he shared ways of Openai partly over Altman’s push to convert startup to a pre-profit company. Altman claims that Musk would merge Openai to his for-profit electric vehicle company, Tesla (TSLA) so that Tesla could give it further funding.

During a hearing on Tuesday, Musk’s lawyers said Tesla CEO made it “clearly” that his donations were conditional on obligations from Altman and Brockman to operate Openai as a non-profit.

“It’s absolutely plausible that there was an oral contract,” the judge said. Later, she noted that Musk’s lack of claim for a written contract for his $ 45 million in donations led to the parties’ dispute.

Musk has also appointed LinkedIn founder Reed Hoffman and Microsoft Executive Deanna Templeton as defendant and claimed they illegally served as directors of both Openai and Microsoft at a time when the two companies were competing in the AI ​​market.

Hoffman has since withdrawn from the nonprofit board. Templeton is a non-voted observer.

Musk’s lawyer, Marc Toberoff, said during the hearing that giving Openai the opportunity to continue to pursue for-profit status would cause “irreparable harm” to Musk, Xai, Investors and the Public.

According to Musk, Altman Love against unreasonable competition by communicating a “fund no competitors” Edict to Openai’s current and potential investors and by orchestrating Hoffmans and TempleTon’s interlocking board positions. These are claims that Openai and Altman -Attorney Sarah Eddy refused.

“I have significant concerns with Microsoft, who have put two members or two people on the board,” Gonzales Rogers said. “Whether they voted or EJ-they were still information sharing.”

Gonzalez Rogers was skeptical of Musk’s claim that investors were swayed, even though there was an edict, as well as Altman’s claim that such a limitation never existed.

Musk’s lawyers told the judge that the alleged limitation was intended to block Xai and other rival companies from accessing a small pool of capital earmarked for artificial intelligence, and in turn further anchor Microsoft’s dominant AI market share.

From October 2024, Microsoft had poured $ 13.75 billion in Openai. Musk’s lawyer said Xai had raised $ 11 billion after Altman’s alleged mandate, which received a note of skepticism from the judge.

“How can I say … There is a likelihood of restraint with trade when your client has raised $ 11 billion,” asked Gonzalez Roger’s Musk’s lawyer.

She also offered skepticism when she discussed arguments made by Openai.

“Where is the statement from Sam Altman to say that I did not publish this edict?” The judge asked Openai’s lawyer.

She then pushed Microsoft’s and Openai’s lawyers to explain the relationship between the two companies.

Eddy placed Microsoft as a competitor to Openai in the limited chatbots market. Microsoft’s Chatbot, Copilot, she said, competing with Openais Chatbot, Chatgpt.

“Are they competitors, or are they partners?” Gonzalez asked Rogers, pointing out that Microsoft identified Openai as a competitor in his regulatory archiving.

“The thing is, they are competitors and they are also partners,” said Microsoft’s lawyer, Russell Cohen.

From October 2023, Openai was valued at $ 157 billion. The organization is reportedly now in discussions to raise an additional $ 40 billion, which would reportedly increase its valuation to an estimated $ 340 billion.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on x @Atexiskweed.

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