May 5 (Reuters) - Elon Musk plans to proceed with his

highly watched lawsuit against OpenAI, his lawyer Marc Toberoff

said on Monday, hours after the AI startup dialed back its

earlier plan to remove control by its non-profit arm.

Under OpenAI's newly proposed plan, its non-profit parent would

continue to control the for-profit business and become a major

shareholder.

"Nothing in today's announcement changes the fact that

OpenAI will still be developing closed-source AI for the benefit

of Altman, his investors, and Microsoft ( MSFT )," Toberoff said in a

statement. "The announcement obscures critical details about the

supposed 'non-profit control' arrangement, and particularly the

sharply reduced ownership stake the non-profit will receive in

Altman's for-profit enterprise."

Musk has been fighting in court to block OpenAI's transition

from its non-profit control, taking the high-profile company he

co-founded and now competes with into a lengthy legal fight.

Other big companies such as Meta and prominent figures,

including Nobel Prize winner Geoffrey Hinton known as the

godfather of AI, have joined critics urging regulators to block

OpenAI's restructuring. A jury trial had been scheduled for

March 2026.

"Elon continuing with his baseless lawsuit only proves that

it was always a bad-faith attempt to slow us down," a

spokesperson for OpenAI said in a statement.

(o aReporting by Krystal Hu and Anna Tong; Editing by Christian

Schmollinger and Chizu Nomiyama)