A U.S. judge has denied Elon Musk’s request to block OpenAI from shifting to a for-profit model, dealing a legal setback to the Tesla CEO amid his ongoing dispute with OpenAI’s Sam Altman.
On Tuesday, U.S. District Court Judge Yvonne Gonzalez Rogers ruled that Musk and his AI startup, xAI, failed to demonstrate the need for an injunction against OpenAI while the case proceeds to trial.
Musk had sued in federal court in California, claiming that OpenAI’s move from a nonprofit to a for-profit entity violated antitrust laws and betrayed the mission he helped establish as a co-founder. However, while the judge rejected Musk’s request for an immediate injunction, she signaled her willingness to fast-track a trial on the issue later this year.
The decision allows OpenAI to continue its transition to a for-profit model.
Musk’s legal argument centered on claims that OpenAI’s co-founders, including CEO Sam Altman, misled him into funding the company by portraying it as a nonprofit venture. Court documents indicate that Musk’s case relied on email exchanges suggesting he believed OpenAI would remain a nonprofit.
However, the judge noted that it remains uncertain whether Musk’s communications—such as emails and social media posts—constituted a legally binding contract or charitable trust.
In a related development, OpenAI’s board rejected a Musk-led $97.4 billion buyout offer for the company in February.
“OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition,” OpenAI Board Chair Bret Taylor said in a statement shared on Musk-owned X, formerly Twitter.
OpenAI currently operates as a nonprofit with a for-profit subsidiary. Musk, who co-founded OpenAI in 2015 and contributed $45 million in initial funding, left the company in 2018 due to a potential conflict with Tesla’s increasing focus on AI.
Following OpenAI’s rise to prominence, Musk launched his own AI company, xAI, in early 2023. OpenAI’s shift toward a for-profit model comes as it seeks to attract investment and ensure financial stability amid the high costs of developing AI technologies.
