Elon Musk loses initial attempt to block OpenAI’s for-profit conversion

Rogers found that because “the threshold question of whether a charitable trust was created remains a toss-up, Musk has not demonstrated likelihood of success on the merits sufficient to obtain an injunction.”

Trial expedited to fall 2025

Musk’s lawsuit also names OpenAI investor and partner Microsoft as a defendant and alleges that the companies violated antitrust law “based on the alleged issuance of a so-called ‘fund no competitors’ edict issued by OpenAI and Microsoft allegedly commanding OpenAI investors to avoid investing in any competitor.” But Rogers’ ruling said the lawsuit “has not actually alleged, or provided evidence of, an actual agreement between Microsoft and OpenAI to collude. That Microsoft is a major investor in OpenAI does not, by itself, support such a finding.”

Musk further complained about “interlocking directorates on the Microsoft and OpenAI boards” and sought an order “barring either corporation from benefiting from improper information sharing.” The overall case could drag on for years, but Rogers said the question of OpenAI’s for-profit conversion can be addressed in 2025.

“[G]iven the public interest at stake and potential for harm if a conversion contrary to law occurred, the Court is prepared to expedite trial to the fall of 2025 solely on that claim and potentially the interrelated contract-based claims,” she wrote. “However, the Court would require all ancillary claims to be stayed. As discussed at the hearing, it is unlikely the full case will be ready for trial until 2027 or 2028.”

Musk and a consortium of investors recently made a $97.4 billion offer to buy OpenAI last week. OpenAI was founded as a nonprofit in 2015 and created an additional “capped profit” entity in 2019. That would change with OpenAI’s planned shift to a for-profit public benefit corporation, but a nonprofit arm would continue to exist. OpenAI has reportedly considered granting special voting powers to its nonprofit board so that it would retain control over the restructured company.

Separately, UK authorities today dropped an investigation into whether the Microsoft/OpenAI partnership violates competition law.

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