A federal judge has scheduled a trial date for March in Elon Musk’s legal dispute with Sam Altman regarding the significant changes planned for OpenAI’s organizational structure. This development marks an impending confrontation between the two prominent tech moguls.
US District Judge Yvonne Gonzalez Rogers, based in Oakland, California, confirmed the trial will commence on March 16 during a hearing on Friday, following her previous commitment to expedite the proceedings instead of allowing them to extend to 2027.
Last month, Judge Gonzalez Rogers denied Musk’s motion to temporarily halt OpenAI’s transition from a nonprofit entity to a public benefit corporation. She emphasized the need for a swift trial concerning Musk’s primary legal challenge, asserting that OpenAI’s restructuring plan is unlawful.
The confirmed trial date may influence decisions made by OpenAI’s board as they strategize the transition to a for-profit model. It is also possible that the trial could occur following the completion of this shift, as the company is already in discussions with officials in Delaware and California regarding its restructuring plans. The timeline for OpenAI’s latest funding round is partly contingent upon finishing the restructuring by the close of 2025.
Musk and Altman co-founded OpenAI in 2015. Musk now argues that OpenAI has deviated from its original charitable mission by accepting significant investments from Microsoft Corp. starting in 2019, the year after Musk exited the board.
In 2023, Musk launched his own artificial intelligence venture and, by late March, xAI acquired the X social media platform, which he also owns. The new entity, dubbed XAI Holdings, boasts a valuation exceeding $100 billion (approximately Rs. 8,55,000 crore), according to Bloomberg News.
OpenAI has dismissed Musk’s legal allegations, asserting that his motivations are geared towards benefitting xAI. The company has requested the dismissal of Musk’s lawsuit, characterizing it as an attempt to “undermine a successful competitor” after Musk’s failed efforts to gain control of OpenAI.
Earlier this week, OpenAI announced the completion of a $40 billion (approximately Rs. 3,42,000 crore) funding round, primarily backed by SoftBank Group Corp. This deal values the company at $300 billion (about Rs. 25,65,000 crore), including the funds raised, nearly doubling its previous worth of $157 billion (around Rs. 13,42,350 crore) from a funding round in October.
However, should OpenAI not finalize its restructuring by the end of 2025, SoftBank retains the right to decrease its funding commitment from $30 billion (approximately Rs. 2,56,500 crore) to $20 billion (around Rs. 1,71,000 crore), as reported by Bloomberg. OpenAI would then have the option to seek alternative investors.
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