A federal judge set a March trial in Elon Musk’s challenge to Sam Altman’s plans to overhaul OpenAI’s business structure, setting the stage for a high-stakes clash between the two billionaires.
US District Judge Yvonne Gonzalez Rogers in Oakland, California, put the trial on her calendar for March 16 during a hearing Friday after previously pledging to fast-track it rather than let it linger until 2027.
Gonzalez Rogers last month rejected Musk’s request to temporarily pause the ChatGPT maker’s transformation from a nonprofit to a more conventional, public benefit for-profit company. But she called for an expedited trial on the “core” claim from Musk’s 2024 lawsuit that OpenAI’s restructuring plan is unlawful.
Having a firm trial date could impact decisions made by OpenAI’s board on choosing a strategy to shift to a for-profit business model. It’s also possible that the trial will begin after OpenAI has completed this shift: The startup is already in talks with officials in Delaware and California over its restructuring plans, and the size of its latest funding round is partly dependent on completing its restructuring process by the end of 2025.
Musk and Altman worked together to found OpenAI in 2015. Musk now claims that OpenAI retreated from its founding purpose as a charity when it accepted billions of dollars in backing from Microsoft Corp. starting in 2019, the year after he left OpenAI’s board.
The world’s richest person launched his own artificial intelligence startup in 2023, and in late March xAI acquired the X social media platform, which he also controls, giving the new combined entity, called XAI Holdings, a value of more than $100 billion (roughly Rs. 8,55,000 crore), Bloomberg News reported.
OpenAI has denied Musk’s legal claims and has argued that his real agenda in the court fight is to advance xAI. It has asked the judge to dismiss Musk’s suit as a bid to “undermine a successful competitor” after he was “unable to seize control” of OpenAI.
OpenAI said earlier this week that it finalized a $40 billion (roughly Rs. 3,42,000 crore) funding round led by SoftBank Group Corp. The deal values the company at $300 billion (roughly Rs. 25,65,000 crore) including dollars raised — almost double the ChatGPT maker’s previous valuation of $157 billion (roughly Rs. 13,42,350 crore) from when it raised money in October.
If OpenAI doesn’t complete its restructuring by the end of 2025, however, SoftBank would be able to reduce the amount of funding it’s contributing to the round from $30 billion (roughly Rs. 2,56,500 crore) to $20 billion (roughly Rs. 1,71,000 crore), as Bloomberg has reported, while OpenAI would have the option to find other investors.
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