- Lawyers for Elon Musk and Sam Altman from OpenAI faced each other in a California courtroom on Tuesday.
- A court looked at Musk’s request to stop OpenAI from becoming a for-profit company.
- The judge said that the CEO of Tesla and SpaceX’s claims of “irreparable harm” were exaggerated.
In a recent court session in California, US District Judge Yvonne Gonzalez Rogers described Elon Musk’s well-known action against Sam Altman as a battle between billionaires.
The federal judge said she is open to having a trial for some of the claims made by the CEO of Tesla and SpaceX. In the case, Musk claims OpenAI and Microsoft of civil racketeering and fraud.
In an Oakland courtroom, Judge Gonzalez Rogers said about the moves to dismiss the lawsuit against Altman’s OpenAI and Microsoft, “I’ve looked closely at this case, and I can tell you that some parts of the request will be accepted and some parts will be rejected.”
“I don’t know what happened, but I’m not going to dismiss this case because it’s possible that what Mr. Musk is saying could be true,” the judge said. “We’ll see. He’ll take the stand and show it to the jury.” A panel will determine who is correct. Something is going to court.
Musk and Altman’s lawyers said they could be ready for trial by the end of next year at the earliest.
Tuesday’s meeting was held so that Gonzalez Rogers could hear reasons for and against Musk’s request for a preliminary injunction to block OpenAI’s ongoing transition from a nonprofit to a for-profit entity. If approved, the order would delay OpenAI’s changes.
Musk also wants a court order to stop OpenAI from telling its backers not to invest in other companies that compete with it.
OpenAI lawyer William Savitt told the judge that they haven’t shown any harm they will face if an order is not granted. “He asks for sweeping relief to straightjacket a competitor,” Savitt said of Musk’s own artificial intelligence company, xAI.
Gonzalez Rogers didn’t make a decision right away, but she mentioned that the help Musk wants is “unusual” and “not often given.”
The judge also questioned Musk’s ability to say he would suffer “irreparable harm” in this situation.
“I have billionaires against billionaires,” said Gonzalez Rogers.
The judge told Musk’s lawyer, Marc Toberoff, that it’s hard to say legally that you deserve help in this situation. Toberoff replied, saying he doesn’t think that’s unreasonable.
At another point the judge asked Toberoff how much Musk has raised for xAI — “How many billions at this point?”
“How can I say as a matter of law there is a likely restraint on trade when your client has raised $11 billion?” she asked.
Doubt From The Judge
At one point, the judge laughed at the idea that Musk or the funders didn’t know OpenAI was planning to make a profit. She said it’s surprising that people think investors don’t know what’s happening, especially since they have put over $300 billion into the company.
Musk isn’t new to this, she joked, “especially since he’s currently running the government, who knows what will happen.”
Toberoff explained that xAI had to create its own systems from the ground up, unlike OpenAI, which has the support of Microsoft’s large cloud servers. The judge jokingly responded, “Well, the Chinese don’t think it’s too costly,” referring to the Chinese company DeepSeek.
Musk is suing Altman and OpenAI, the company they co-founded ten years ago. He claims Altman has ignored OpenAI’s original goal of being a charity focused on making AI technology safe and accessible for everyone’s benefit. An amended lawsuit brought by Musk charges fraud, breach of contract, racketeering, and violations of antitrust laws, among other complaints.
The lawsuit claims that OpenAI and Microsoft broke antitrust laws by telling investors not to support rival AI companies, including Elon Musk’s xAI. It also accuses OpenAI leaders, including Altman, of tricking Musk into starting the business.
The claim states that Altman consistently told Musk and regulators that the nonprofit setup would ensure fairness and prioritize safety and openness for everyone’s benefit, rather than focusing on profits or personal gain.
It says, “After Musk became co-chairman, spent a lot of time and millions of dollars, and brought in top AI experts for OpenAI, he and the nonprofit’s original goals were let down by Altman and his team.”
The judge didn’t make a decision right away on Musk’s request for an order, but she clearly doubted it.
“It’s not my responsibility to stop the competition. The situation between Musk and xAI, and OpenAI and Microsoft, is still unclear,” she said.
“This county values competition,” said Gonzalez Rogers. “You are asking me to get involved in the playing field. This judge is not creating an unfair situation.
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