Elon Musk has stated that he will withdraw his $97.4 billion bid for OpenAI’s non-profit arm if the company abandons its transition into a for-profit entity. The condition was revealed in a court filing submitted by Musk’s lawyers on Wednesday.
“If the OpenAI board is prepared to preserve the charity’s mission and stipulate to take the ‘for sale’ sign off its assets by halting its conversion, Musk will withdraw the bid,” the filing stated.
The filing further argued that if OpenAI proceeds with its for-profit restructuring, the non-profit arm must be compensated at fair market value.
Musk’s Dispute with OpenAI’s Leadership
Musk, a co-founder of OpenAI alongside Sam Altman, has been at odds with the company’s direction since he left due to strategic disagreements.
•OpenAI was founded in 2015 as a non-profit, focused on open-source AI research for the benefit of humanity.
•Under Altman’s leadership, OpenAI introduced a for-profit arm to attract major investors, including Microsoft, which has since invested $13 billion.
•Altman is now spearheading a restructuring plan that would reduce the non-profit board’s control, giving more power to investors.
•Musk has filed a lawsuit to block this move, arguing that OpenAI’s assets should not be privatized for profit.
Earlier this week, Musk and a consortium of investors submitted a bid to acquire OpenAI’s non-profit arm to prevent the restructuring. If successful, the deal could see OpenAI merge with Musk’s AI company, xAI.
Investor Backing and OpenAI’s Response
Musk’s bid is backed by major investors, including Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, Joe Lonsdale’s 8VC, and Ari Emanuel’s investment fund. The investor group’s lawyer, Marc Toberoff, confirmed the offer but declined further comments.
However, OpenAI has pushed back, with Altman stating that the non-profit arm is “not for sale.” OpenAI also countered Musk’s bid, arguing that it contradicts his legal claim that OpenAI’s assets should remain non-commercial.
Growing Legal Battle
Musk and Altman’s dispute has escalated over the years, with Musk accusing OpenAI of deviating from its mission and forming a monopoly with Microsoft.
•Musk has alleged that OpenAI’s partnership with Microsoft is aimed at stifling competitors like xAI.
•OpenAI has rejected these claims, suggesting Musk’s criticism stems from his unsuccessful attempt to integrate the company into Tesla.
•Musk’s lawsuit, now expanded to 107 pages with 26 legal claims, highlights the intensifying battle over the future of OpenAI and the broader AI industry.
As the legal fight unfolds, the outcome could shape the direction of AI governance, investment, and competition in the years to come.
