A group of investors, led by Elon Musk, has offered approximately $97.4 billion to acquire OpenAI, intensifying an ongoing legal dispute with the AI company Musk co-founded.
Musk, his AI venture xAI, and a consortium of investment firms aim to gain control of the ChatGPT creator and restore its original non-profit research lab status, according to Musk’s lawyer, Marc Toberoff.
OpenAI’s CEO, Sam Altman, swiftly rejected the offer on Musk’s X platform, countering with a proposal to purchase Twitter for $9.74 billion.
Musk acquired Twitter (now X) for $44 billion in 2022.
Musk and Altman, who collaborated on OpenAI’s inception in 2015 and later contended for leadership, have been embroiled in a prolonged disagreement regarding the startup’s trajectory since Musk’s departure from the board in 2018.
Musk, an early investor and board member of OpenAI, filed a lawsuit against the company last year, initially in a California state court and subsequently in federal court, alleging a breach of its founding principles as a non-profit research lab dedicated to public benefit. Toberoff stated that Musk invested roughly $45 million in the startup from its inception until 2018.
Musk and OpenAI’s legal teams recently appeared before a California federal court judge considering Musk’s request for an injunction to prevent OpenAI’s transition to a for-profit entity.
U.S. District Judge Yvonne Gonzalez Rogers hasn’t yet ruled on Musk’s request but indicated in court that Musk’s claim of irreparable harm without intervention was a “stretch.”
However, the judge also voiced concerns about OpenAI’s relationship with Microsoft and confirmed the case would proceed to trial potentially as early as next year for jury deliberation.
“It is plausible that what Mr. Musk is saying is true. We’ll find out. He’ll sit on the stand,” she stated.
Besides Musk and xAI, other participants in the bid announced on Monday include Baron Capital Group, Valor Management, Atreides Management, Vy Fund, Emanuel Capital Management, and Eight Partners VC.
Toberoff stated that if Altman and OpenAI’s board proceed with the for-profit conversion, it’s crucial that the charity receives fair compensation for the loss of control over “the most transformative technology of our time.”
Musk’s attorney also disclosed a letter sent in early January to the attorneys general of California and Delaware.
“As both your offices must ensure any such transactional process relating to OpenAI’s charitable assets provides at least fair market value to protect the public’s beneficial interest, we assume you will provide a process for competitive bidding to actually determine that fair market value,” Toberoff wrote, requesting further details on the bidding process terms and timeline.
