U.S. District Judge Yvonne Gonzalez Rogers' comments came during a three-hour hearing in Oakland on Musk and his artificial intelligence company X.AI Corp.'s motion for a preliminary injunction seeking to stop OpenAI from becoming a for-profit.
Musk — who leads X Corp., Space Exploration Technologies Inc. and Tesla Inc. — filed the injunction bid in December, three months after first suing the ChatGPT maker in federal court and a month after adding its biggest investor, Microsoft Corp., as a defendant along with former Microsoft board members Reid Hoffman and Deannah Templeton.
The sprawling antitrust litigation accuses OpenAI of reversing its mission and reneging on its promise to make technological advances open to the public, so AI development would be "for the benefit of humanity."
The suit asserts claims of racketeering, fraud and other wrongdoing, with its planned move to become a for-profit company. The operative the complaint also accuses Microsoft of cutting anticompetitive deals with OpenAI to block investors from funding rivals like Musk's company.
Judge Gonzalez Rogers kicked off the hearing telling Musk's counsel, Marc Toberoff of Toberoff & Associates PC, that she rarely grants a preliminary injunction, and that "it is an extraordinary relief — extraordinary."
Judge Gonzalez Rogers then asked Toberoff when he would be ready for trial. After he suggested late 2026 or early 2027 and agreed that he would likely move for summary judgment, he told the judge he wasn't prepared to discuss the trial schedule because the hearing was set for a preliminary injunction motion. The judge retorted, "I always start it this way."
"The reason I start it this way, is because you're asking for a preliminary injunction, and you should have sorted through all of these pieces, because I don't grant injunctions, which are extraordinary, unless I know what the endgame is," she said.
The judge noted the last time she granted a preliminary injunction was in 2020 in Epic Games Inc.'s landmark antitrust case against Apple Inc. over its App Store restrictions, which she said is nothing like the motion pending in this case. She added that she only granted that motion in part, and the parties held a trial within eight months. Judge Gonzalez Rogers said she's already spent a lot of time analyzing Musk's complaint, and the state law claims are likely plausible but the statutory and antitrust claims "I'm not so sure about."
"I will tell you right now [a motion for summary judgment] will be granted in part and denied in part," she said. "Something is going to trial in this case."
Judge Gonzalez Rogers went on to hear arguments on the motion for the injunction, but throughout the hearing she called the bid "pretty broad" and took issue with it for including board members even though the complaint doesn't identify all potential individual board members.
"Your [proposed] language would effectively have me running the business," she said.
She also criticized the complaint for treating Musk as the same as — or a potential "alter ego" of — his AI company, as it could expose Musk to liability in other litigation.
"Frankly, it's quite dangerous for your client how you outlined this complaint," the judge said. "For you to say he's one and the same has natural consequences."
Judge Gonzalez Rogers additionally questioned why Musk would contribute $45 million to OpenAI's nonprofit arm without a written contract. Toberoff argued that it was because Musk had a close relationship with OpenAI CEO Sam Altman, and there were email and text message exchanges between the two regarding Musk's investments, and he was clear he would not invest in a for-profit company. Even so, the judge appeared skeptical.
"I understand your argument, it's just a lot of money to do on a handshake," she said. "I'm just stating the obvious. Forty-five million on a handshake and what do you end up doing? You end up in court."
For his part, Toberoff agreed to distinguish between Musk and his company in future filings, and he argued that without the injunction Musk and his AI company will be irreparably harmed as Musk's company and OpenAI's rivals would be blocked from lucrative investment opportunities from a small pool of high-value investors.
However, the judge doubted that any potential harm would be irreparable, and she noted that the industry changes day by day and that Musk has already raised $11 billion.
"It is a stretch to claim irreparable harm in this case," she said. "I have billionaires versus billionaires here."
Even so, Toberoff insisted that the fluctuations in the industry further exacerbates OpenAI's alleged misconduct, particularly since it costs billions of dollars to keep running AI companies.
"When you look at that it's a cumulative effect of nascent industry," he said. "They're seeking to strangle competitors in the crib."
Judge Gonzalez Rogers repeatedly asked what evidence supports Musk's claim Microsoft cut an anticompetitive deal with OpenAI, and she ordered OpenAI to submit a declaration under oath by Altman stating that he never asked investors not to fund rivals by the end of the week.
Counsel for OpenAI and Microsoft each took turns arguing against the injunction and criticizing the allegations as being unfounded.
Musk is represented by Marc Toberoff and Jaymie Parkkinen of Toberoff & Associates PC.
Altman and OpenAI 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.
Microsoft, Hoffman and Templeton are represented by Russell P. Cohen and Nisha Patel of Dechert LLP.
The case is Elon Musk 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 Bryan Koenig, Lauren Berg, Craig Clough, Hailey Konnath, Jared Foretek and Hannah Albarazi. Editing by Brian Baresch.
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