Elon Musk has been pressing hard to halt OpenAI’s transition into a for-profit entity. But the high-stakes legal battle isn’t seemingly working out in his favor. In the latest news, a U.S. judge has denied the billionaire’s request for a preliminary injunction to pause OpenAI’s transition to a for-profit model. However, she did agree to a fast-track trial in the fall of this year to address his claims against OpenAI and its CEO, Sam Altman.
According to U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, Musk doesn’t have “the high burden required for a preliminary injunction” to block the conversion of OpenAI. However, Rogers wrote in the order that she wanted to resolve the lawsuit quickly given “the public interest at stake and potential for harm if a conversion contrary to law occurred.”
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The filing noted that even though the plaintiffs “failed to meet their burden of proof for the extraordinary relief requested,” other aspects of Musk’s lawsuit against OpenAI can proceed. Currently, OpenAI is overseen by a non-profit parent that Elon Musk recently offered to buy. However, the company’s board unanimously rejected the $97.4 billion offer to buy OpenAI.
Since Musk has become Altman’s chief adversary, he has been putting obstacles in OpenAI’s path to becoming a for-profit entity, claiming that the AI startup will deviate from its original mission of developing artificial intelligence for the benefit of humanity. OpenAI and Altman have denied these accusations, stating that the shift is essential to raise capital and effectively compete in the rapidly evolving AI industry.
OpenAI has welcomed the judge’s recent decision, stating that the lawsuit by Musk, who launched rival startup xAI in 2023, has “always been about competition”. Meanwhile, Marc Toberoff, a lawyer for Musk, said they were pleased the judge “offered an expedited trial on the core claims driving this case”.
“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.”
-Marc Toberoff.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.
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10. BigBear.ai Holdings, Inc. (NYSE:BBAI)
Number of Hedge Fund Holders: 13
BigBear.ai Holdings, Inc. (NYSE:BBAI) is an artificial intelligence specialist that provides decision intelligence solutions. On March 6, the company announced its financial results for the fourth quarter of 2024. The company reported Q4 EPS of ($0.43), $0.37 worse than the analyst estimate of ($0.06). Revenue for the quarter came in at $43.8 million versus the consensus estimate of $53.84 million. The company stated that the 8% increase in revenue has been primarily due to additional revenue related to Department of Homeland Security and Digital Identity awards. Looking ahead, BigBear.ai sees FY2025 revenue of $160-180 million, falling short of the consensus of $193.9 million. The company has noted that in the event of a potential U.S. government shutdown or shift in national security priorities, its 2025 outlook would be impacted and require a guidance review.
“2024 was a pivotal year for the business. We demonstrated momentum through major contract wins, expanding our backlog and growing our pipeline, maturing our technology portfolio, and restructuring our debt to strengthen our financial position for the long term. These efforts were driven by strong execution from our team.”
-Kevin McAleenan, Chief Executive Officer, BigBear.ai.
9. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 77
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in AI-driven endpoint and cloud workload protection. On March 5, Citizens JMP analyst Trevor Walsh reiterated a “Market Outperform” rating and $400.00 price target on the stock. According to Walsh, Crowdstrike has recovered from the headwinds of the July 2024 outage and is well on track toward product renewals in FY26. Lauding the management on how it handled the situation, Walsh also pointed out to continued growth in key product areas, such as Falcon Cloud Security, Falcon Identity Protection, and LogScaleNext-Gen SIEM.
All three of these products are part of Crowdstrike’s AI-powered Falcon platform that provides comprehensive cybersecurity solutions. He further noted how current macroeconomic uncertainty is pushing discussions around platform consolidation, which may prove fruitful for Crowdstrike. In addition, the analyst also highlighted the company’s AI innovations, particularly Charlotte AI. Charlotte AI, the digital security analyst, along with the company’s efforts to secure AI workloads, demonstrates its rapid growth and monetization in AI.