SAN FRANCISCO: A United States judge on Tuesday (Mar 4) denied Elon Musk's request to prevent OpenAI from becoming a for-profit business in a loss for the Tesla tycoon amid his feud with Sam Altman.

US District Court Judge Yvonne Gonzalez Rogers ruled that Musk and his xAI startup failed to prove an injunction against OpenAI was necessary as the case heads to trial.

Musk sued in the California federal court to stop OpenAI from transitioning from a nonprofit to a for-profit business, arguing the startup violated antitrust law and betrayed his trust in their mission as a co-founder of OpenAI.

The judge wrote that, while Musk did not prove the need for an injunction, she is prepared to expedite a trial on that claim later this year.

The ruling leaves OpenAI free to continue its transition from nonprofit to for-profit enterprise.

Musk's injunction bid argued that OpenAI's co-founders, including chief executive Altman, "took advantage of Musk's altruism in order to lure him into funding the venture", according to court documents.

The CEO of Tesla contended in filings that it was clear his backing of OpenAI was contingent on it remaining a nonprofit, offering a few email exchanges to support the claim.

"Whether Musk's emails and social media posts constitute a writing sufficient to constitute an actual contract or charitable trust between the parties is debatable," the judge said in her ruling.

OpenAI's board chairman in February rejected a Musk-led offer to buy the valuable artificial intelligence (AI) company for US$97.4 billion.

"OpenAI is not for sale, and the board has unanimously rejected Mr Musk's latest attempt to disrupt his competition," OpenAI Board Chair Bret Taylor said in a statement posted by the company on Musk-owned X, formerly Twitter.

OpenAI currently operates in a hybrid structure, as a nonprofit with a money-making subsidiary.

The change to a for-profit model - one that Altman considers crucial for the company's development - has exacerbated ongoing tensions with Musk.

Musk and Altman were among the 11-person team that founded OpenAI in 2015, with the former providing initial funding of US$45 million.

Three years later, Musk departed the company, with OpenAI citing "a potential future conflict for Elon ... as Tesla continues to become more focused on AI".

Musk established his own AI company, dubbed xAI, in early 2023 after OpenAI ignited global fervour over the technology.

The massive cost of designing, training and deploying AI models has compelled OpenAI to seek a new corporate structure that would give investors equity and provide more stable governance.