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OpenAI fires back at Elon Musk bid to block for-profit conversion
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OpenAI fires back at Elon Musk bid to block for-profit conversion
Dec 13, 2024 7:06 PM

Dec 13 (Reuters) - OpenAI asked a federal judge in

California on Friday to reject a request by billionaire Elon

Musk to halt the ChatGPT maker's conversion to a for-profit

company.

OpenAI also published a trove of emails and text messages

with Musk on its website to argue that he initially backed

for-profit status for OpenAI before walking away from the

company after failing to get a majority equity stake and full

control.

Musk, who was an OpenAI cofounder, has since launched a

competing artificial intelligence company, xAI.

Musk sued OpenAI, its CEO Sam Altman and others in August,

claiming they violated contract provisions by putting profits

ahead of the public good in the push to advance AI. In November,

he asked U.S. District Judge Yvonne Gonzalez Rogers in Oakland

for a preliminary injunction blocking OpenAI from converting to

a for-profit structure.

A lawyer for Musk did not immediately respond to a request

for comment on Friday.

OpenAI's blog post said Musk "should be competing in the

marketplace rather than the courtroom."

Musk has since added Microsoft ( MSFT ) and others as

defendants to his lawsuit, alleging OpenAI was scheming to

sideline rivals and monopolize the market for generative

artificial intelligence.

OpenAI's court filing denied any conspiracy to restrain AI

market competition, and it said Musk's request for a preliminary

injunction was based on "unsupported allegations."

In a separate court filing, Microsoft ( MSFT ) on Friday said it and

OpenAI "are independent companies that each pursue their own

strategies and compete vigorously with each other and many

others." Microsoft ( MSFT ) said its OpenAI partnership has "fueled

innovation between them and others."

OpenAI started as a nonprofit in 2014 and has become the

face of generative AI through billions of dollars in funding

from Microsoft ( MSFT ). In October, it closed a $6.6 billion funding

round from investors, which could value the company at $157

billion.

Musk's xAI earlier this month said it had raised about $6

billion in equity financing.

OpenAI is working on a plan to restructure its core business

into a for-profit benefit corporation. The OpenAI nonprofit

would own a minority stake in the for-profit company.

Rogers is scheduled to hear arguments on Musk's injunction

bid on Jan. 14.

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