Openai cannot evade Musk's fraudulent claims in restructuring lawsuits

A judge narrowed his claims in Elon Musk’s lawsuit, saying Openai violated its commitment as a public charity by planning to transform itself into a for-profit business.

U.S. District Court Judge Yvonne Gonzalez Rogers ruled Thursday that the world's wealthiest person could file fraud claims in his complaint against OpenAI last year. She also refused to dismiss an injustice reinforcement claim against the startup's main investors Openai and Microsoft Corp.

But she made a claim for false advertising and breached her fiduciary obligations claim against the startup. Both companies have won the firing of Musk's racket claim, but she gave the billionaire to amend the allegation through a revised complaint.

In response to a request for comment, an OpenAI spokesperson listed last month’s social media posts saying Musk’s actions were illegal and aimed at curbing the company’s growth to benefit his rival startup XAI, which he launched in 2023.

Musk's lawyers and Microsoft representatives did not immediately respond to requests for comment.

Musk, who worked together to launch OpenAi, had a legal dispute with Sam Altman a decade ago as the startup is working on a restructuring plan with officials in Delaware and California and faces pressure to complete an overhaul by the end of 2025. There is an option to find other investors.

Gonzalez Rogers recently said she intends to reduce the claims in the lawsuit when she arranges a March trial of the dispute.

Musk claims that after leaving the startup board in 2018, he established an alliance with Microsoft to occupy a generative AI industry that threatens competitors' free-market competition. His lawyers also claimed that Microsoft knew Openai co-founders Altman and Greg Brockman were working on “a plan to deceive his valuable contributions and support his own.”

Gonzalez Rogers approved Openai and Microsoft's request to discard Musk's claims, and they helped with the fraud. But she ruled that Microsoft must face claims to interfere with Openai and Musk's contract, which he said was the startup's technology that benefits the public.

Gonzalez Rogers said in the ruling that Musk “reasonably claimed that Microsoft knew about the charitable trust and took steps in the contract that constituted “substantive assistance or encouragement.”

The case is Musk v. Altman v. Altman in U.S. District Court, Northern District, 24-CV-04722.

This article was generated from the Automation News Agency feed without the text being modified.