U.S. District Judge Yvonne Gonzalez Rogers said that email exchanges between Musk and OpenAI CEO Sam Altman conveyed early communications concerning OpenAI's early "altruistic motives" as well as reassurances by Altman and OpenAI President Greg Brockman about the motives when Musk appeared upset about the entity's structure trajectory.
But those emails, "though highly suggestive," do not by themselves show a likelihood of success on the merits sufficient for an injunction, Judge Gonzalez Rogers wrote.
She said that there was evidence implying that Musk had himself considered being the one to turn OpenAI into a for-profit company.
"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," Judge Gonzalez Rogers wrote in her order denying Musk's motion for a preliminary injunction.
Judge Gonzalez Rogers, however, said that the "public interest at stake and potential for harm if a conversion contrary to law occurred" likely warranted an expedited trial, saying that the court was ready to push trial to the fall solely on the claim and potentially on interrelated claims.
It was unlikely, however, that the case as a whole would be ready for trial until 2027 or 2028, she said.
Musk — who co-founded OpenAI with Altman, Brockman and others — moved for the preliminary injunction in December, three months after suing the ChatGPT maker and a month after adding Microsoft Corp, a key OpenAI investor, as a defendant.
Musk, who also founded X.AI Corp., a competitor to OpenAI and also a plaintiff in the suit, had lodged 26 claims against Altman, Brockman and OpenAI, as well as Microsoft, among others.
Musk's first amended complaint filed in August alleges that Altman "feigned altruism" to convince Musk to back OpenAI.
Musk further asserted that he contributed the majority of OpenAI's funding in its first several years, contributing more than $44 million "in cash alone" in the company's first five years.
Musk claimed that OpenAI knew that Musk's money was contingent upon its charitable use but that from 2017 to 2018, Altman and Brockman "moved to recast the non-profit as a moneymaking endeavor to bring in shareholders, sell equity, and raise capital, and pressed Musk to agree."
Microsoft, Musk alleged, had also been "keen to exploit" OpenAI and obtained leverage on the nonprofit by, for instance, causing it to become "inextricably dependent" on Microsoft's cloud computing system. Musk asserted that OpenAI and Microsoft also entered into several contractual arrangements, including for Microsoft to supply raw materials to OpenAI.
Both OpenAI and Microsoft filed separate motions in late January to dismiss Musk's suit, calling his allegations "conclusory" and lacking factual or legal support.
In moving for a preliminary injunction, Musk had also asserted that an injunction was warranted because OpenAI and Microsoft violated the Sherman Act through a "fund no competitors" edict to investors that allegedly barred them from investing in competitors.
But Judge Gonzalez Rogers said in her order that X.AI Corp. had pointed to news articles as evidence that OpenAI asked investors not to back competitors.
"Newspaper articles are classic hearsay and, in a court of law, cannot be relied upon for the truth of statements made therein," Judge Gonzalez Rogers wrote.
She said that X.AI Corp. had also "admitted that it could not provide a single declaration from an investor to confirm its theory."
Musk's AI company also didn't allege or provide evidence of an actual agreement between Microsoft and OpenAI to collude, she said.
"That Microsoft is a major investor in OpenAI does not, by itself, support such a finding," Judge Gonzalez Rogers wrote.
Musk ultimately provided "no direct evidence" of a horizontal agreement to boycott, she said, and the fact that Microsoft and OpenAI have a close business relationship "cannot by itself impute the one's behavior to the other."
Judge Gonzalez Rogers' order comes after she last month called Musk's injunction bid "pretty broad" during a three-hour hearing on the preliminary injunction motion.
Her order also comes after OpenAI's board of directors later last month unanimously voted to reject Musk's and other investors' offer to buy the AI platform for $97.4 billion.
Bret Taylor, chair of OpenAI's board of directors, had said when announcing the board's rejection that "OpenAI is not for sale."
Marc Toberoff of Toberoff & Associates PC, an attorney for Musk, told Law360 on Tuesday that they are "pleased the Court has offered an expedited trial on the core claims driving this case, which in its words present 'urgent' issues in the public's interest."
"We intend to accept the Court's offer," Toberoff said. "We look forward to a jury confirming that Altman accepted Musk's charitable contributions knowing full well they had to be used for the public's benefit rather than his own enrichment."
Counsel for the OpenAi and Microsoft parties did not immediately respond to requests for comment.
Musk is represented by Marc Toberoff and Jaymie Parkkinen of Toberoff & Associates PC.
The OpenAI parties are represented by Jordan Eth and David J. Wiener of Morrison Foerster LLP and William Savitt and Sarah K. Eddy of Wachtell Lipton Rosen & Katz.
The Microsoft parties are represented by Russell P. Cohen, Howard M. Ullman, Nisha Patel, Andrew J. Levander and John Jurata Jr. of Dechert LLP.
The case is Elon Musk et al. v. Sam Altman et al., case number 4:24-cv-04722, in the U.S. District Court for the Northern District of California.
--Additional reporting by Craig Clough, Jared Foretek, Bonnie Eslinger and Dorothy Atkins. Editing by Jay Jackson Jr.
Update: This story has been updated with comment from Musk's counsel.
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