Legal experts note that nonprofit-to-for-profit conversions are rare, especially in the tech sector, with such changes more commonly seen in healthcare organizations.

Musk co-founded OpenAI with CEO Sam Altman but left the organization before it became successful, later establishing the competing AI startup xAI in 2023.

OpenAI, co-founded by Musk in 2015, defends its transition to a for-profit structure as essential for securing the funding necessary for advanced AI development.

Recent reports indicate that SoftBank may lead a new funding round for OpenAI, potentially raising up to $40 billion and valuing the company at $300 billion.

Elon Musk's lawsuit, filed in February 2024, challenges OpenAI's transition from a nonprofit to a for-profit entity, arguing that this shift deviates from its original mission of benefiting humanity.

In December 2024, OpenAI announced plans to evolve into a Delaware Public Benefit Corporation (PBC) to better align its mission with ensuring that artificial intelligence benefits all of humanity.

Musk is seeking a preliminary injunction to block OpenAI's transition, but the judge has suggested that the evidence provided may be insufficient for that request.

On February 4, 2025, U.S. District Judge Yvonne Gonzalez Rogers ruled that parts of Musk's lawsuit will proceed to trial, requiring him to testify in court.

The outcome of the trial could significantly impact how AI research organizations are governed and the ethical considerations surrounding AI development.

OpenAI's restructuring is crucial for its fundraising efforts, which include a $6.6 billion round in October 2024 and discussions for a potential $25 billion investment from SoftBank.

In response to Musk's allegations, OpenAI plans to dismiss the lawsuit, suggesting that Musk should compete in the marketplace rather than in court.

Musk expanded his lawsuit to include federal antitrust claims, alleging that OpenAI's leadership breached commitments.