While Elon Musk lost his bid for a preliminary injunction in his lawsuit against OpenAI, a federal judge expressed serious legal concerns about the AI company's shift from non-profit to for-profit, offering hope to those opposing the transformation.
U.S. District Judge Yvonne Gonzalez Rogers on Tuesday denied Musk's request to block OpenAI's transition to a for-profit entity, but noted that significant and irreparable harm could result when public funds are used for such a shift. The judge also referenced "fundamental commitments" made by OpenAI co-founders Sam Altman and Greg Brockman that OpenAI would not be used as a "vehicle for personal enrichment."
OpenAI, founded in 2015 as a non-profit, transitioned to a "capped-profit" structure in 2019 and is now seeking to restructure again as a public benefit corporation. Some of OpenAI's recently raised funds could reportedly convert to debt if the for-profit transition isn't completed by 2026.
The court is prepared to expedite the trial to resolve the corporate restructuring dispute in the fall of 2025. Musk's lawyers expressed satisfaction with the ruling and intend to accept the offer of an expedited trial, while OpenAI has yet to comment.
The judge ruled that while Musk's team presented evidence showing OpenAI's shift to for-profit after receiving approximately $44 million in donations, this evidence "did not meet the high burden required for a preliminary injunction." Some submitted emails even indicated that Musk himself had previously considered OpenAI potentially becoming a for-profit company one day.
Former OpenAI employees have voiced concerns that if the company successfully transitions into a traditional for-profit business, little would prevent it from prioritizing profits over its mission, potentially threatening public safety. Regulators, AI safety advocates, and tech investors will be closely watching the progress of this transition.
