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Attorneys for Elon Musk and OpenAI’s Sam Altman went head to head in a California courtroom Tuesday.
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A judge considered Musk’s bid to block OpenAI’s transition to a for-profit entity.
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The judge called the Tesla and SpaceX CEO’s claims of “irreparable harm” a “stretch.”
Calling Elon Musk’s high-profile lawsuit against Sam Altman a case of “billionaires versus billionaires,” US District Judge Yvonne Gonzalez Rogers pulled no punches in her California courtroom Tuesday.
The federal judge said she’s not opposed to a trial being held on at least some of the claims brought by the Tesla and SpaceX CEO. In the case, Musk accuses OpenAI and Microsoft of civil racketeering and fraud.
Commenting on motions to dismiss the lawsuit filed by Altman’s OpenAI and its backer, Microsoft, Gonzalez Rogers told the attorneys in an Oakland courtroom, “I’ve spent a lot of time with this complaint, I can tell you right now, it will be granted in part and denied in part.”
“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,” the judge 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.”
Attorneys for Musk and Altman said they’d be ready for trial at the end of next year at the earliest.
Tuesday’s hearing was held so that Gonzalez Rogers could hear arguments 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 granted, the injunction would stall OpenAI’s conversion.
Musk also wants the injunction to stop OpenAI from allegedly mandating that its investors not invest in its competitors.
“They haven’t been able to demonstrate any harm they will suffer absent an injunction,” OpenAI attorney William Savitt told the judge. “He asks for sweeping relief to straightjacket a competitor,” Savitt said of Musk’s own artificial intelligence venture, xAI.
Gonzalez Rogers did not immediately rule on the matter, but said that the kind of relief Musk seeks is “extraordinary” and “rarely granted.”
The judge also called questioned Musk’s ability to claim “irreparable harm” in this case.
“I have billionaires versus billionaires,” said Gonzalez Rogers.
“For me to say, as a matter of law, that something that you should be granted relief in this kind of environment is a stretch,” the judge told Musk’s attorney, Marc Toberoff, who shot back, “I don’t believe it’s a stretch.”
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.
At one point, the judge scoffed at the idea that Musk or investors were in the dark about OpenAI’s for-profit intentions. “The notion that people don’t know what’s going on who are investing is incredible,” she said, given that they’ve spent more than $300 billion in funding into the company.
And Musk is no babe in the woods, she quipped, “especially since he’s running the government right now, who knows.”
When Toberoff began explaining that xAI has had to build its own infrastructure “from scratch” — unlike OpenAI, which could rely on Microsoft’s massive cloud servers — the judge quipped, “Well, the Chinese seem to think it’s not that expensive” in a reference to the Chinese startup DeepSeek.
Musk’s lawsuit against Altman and OpenAI — the company the two men helped cofound a decade ago — accuses Altman of betraying OpenAI’s founding mission as a nonprofit research lab dedicated to keeping AI technology safe and freely available for the good of mankind. An amended lawsuit brought by Musk alleges fraud, breach of contract, racketeering, and violations of antitrust laws, among other complaints.
The suit — which alleges OpenAI and Microsoft violated antitrust laws by asking investors not to back competing AI firms like Musk’s own xAI — accuses Altman and other OpenAI executives of deceiving Musk into cofounding the company.
“Altman repeatedly assured Musk and regulators that the nonprofit structure guaranteed neutrality and a focus on safety and openness for the benefit of humanity, not shareholder value or individual enrichment,” the lawsuit says.
It adds, “But after Musk lent his name to the venture as its co-chairman, invested significant time, tens of millions of dollars in seed capital, and recruited top AI scientists for OpenAI, Inc., Musk and the nonprofit’s namesake objective were betrayed by Altman and his accomplices.”
The judge did not immediately rule on Musk’s request for an injunction — but she voiced strong skepticism.
“It’s not my job to somehow stop competition, and things are very murky still in terms of what’s going on between Musk and xAI — and OpenAI and Microsoft on the other hand,” she said.
“This county values competition,” Gonzalez Rogers added. “You are asking me to get involved in the playing field. And this particular judge is not making the playing field uneven.”
Read the original article on Business Insider
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