Tesla CEO Elon Musk has stated he will withdraw his $97.4 billion bid for OpenAI’s non-profit arm if the company proceeds with its transition into a for-profit entity. This condition was outlined in a court filing submitted by his legal team on Wednesday.
The filing asserts that if OpenAI’s board is willing to maintain its non-profit mission and halt its for-profit conversion, Musk will retract his bid. However, should OpenAI continue on its current path, Musk argues that the non-profit must be compensated at market value. His offer, described as a “serious bid,” aims to preserve OpenAI’s original mission.
Musk co-founded OpenAI in 2015 alongside Sam Altman but later departed due to disagreements over the organization’s direction. Under Altman’s leadership, OpenAI introduced a for-profit model to attract investment, including a substantial partnership with Microsoft. Altman is now leading a restructuring effort that would see OpenAI’s non-profit arm retain only a minority stake in the company.
Musk has taken legal action to block the transition, arguing that OpenAI’s assets should not be privatized for profit. Earlier this week, a consortium led by Musk made an acquisition offer for OpenAI’s non-profit division, potentially merging it with his AI company, xAI. Investors backing the proposal include Valor Equity Partners, Baron Capital, and Vy Capital, among others. However, OpenAI has rejected the bid, with Altman stating the non-profit is “not for sale.”
Musk and Altman have long been at odds over OpenAI’s trajectory. Musk contends that OpenAI has deviated from its original goal of open-source, safety-driven AI development, while OpenAI argues that Musk’s criticisms stem from his failed attempt to integrate the company into Tesla.
Since its transition to a for-profit model, OpenAI has secured billions in investments, including a $13 billion stake from Microsoft. Musk’s lawsuit claims that OpenAI has created a monopoly in partnership with Microsoft, stifling competition from firms like xAI. The legal battle now includes 26 claims across 107 pages, deepening the divide between Musk and his former venture.
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