The technology giant’s covert proposal has sparked intrigue in the corporate world. A consortium led by influential entrepreneur Elon Musk is putting forward a staggering sum of approximately $97.4 billion to acquire OpenAI, intensifying an ongoing legal dispute with the artificial intelligence company co-founded by Musk. Alongside his own AI venture, xAI, Musk and a group of investment entities are seeking to wrest control of the maker of ChatGPT and return it to its original philanthropic mission as a nonprofit research institute, as disclosed by Musk’s legal representative Marc Toberoff.
In response, OpenAI’s CEO Sam Altman promptly rebuffed the offer on Musk’s social media platform X, humorously suggesting that they would consider acquiring Twitter for $9.74 billion if Musk was interested. Notably, Musk had previously acquired Twitter, rebranding it as X, for $44 billion in 2022. The rift between Musk and Altman, who were instrumental in establishing OpenAI in 2015 and later engaged in a power struggle for leadership, has been festering since Musk resigned from the board in 2018.
Having been an early investor and board member of OpenAI, Musk filed a lawsuit against the company last year, commencing in a California state court before escalating to federal court. His allegations centered on OpenAI deviating from its original altruistic objectives as a nonprofit research organization dedicated to societal benefit. Toberoff revealed that Musk had injected approximately $45 million into the startup between its inception and 2018.
In a recent legal showdown in a California federal court, Musk and OpenAI’s legal teams clashed as a judge deliberated over Musk’s plea for an injunction to prevent the ChatGPT manufacturer from transitioning into a for-profit entity. While U.S. District Judge Yvonne Gonzalez Rogers has yet to issue a ruling on Musk’s request, she expressed skepticism about Musk’s claim of irreparable harm should the transition proceed, deeming it a “stretch.” Nevertheless, she raised concerns about OpenAI’s ties with corporate partner Microsoft and indicated readiness for the case to progress to trial, potentially as early as next year for a jury verdict.
Joining forces with Musk and xAI in support of the bid are several prominent entities, including Baron Capital Group, Valor Management, Atreides Management, Vy Fund, Emanuel Capital Management, and Eight Partners VC. Toberoff emphasized the importance of equitable compensation should Altman and OpenAI’s current leadership opt for a complete shift to a for-profit structure, highlighting the need to fairly remunerate the charity for relinquishing control over a technology deemed as the most transformative of our era.
Furthermore, Musk’s legal counsel shared correspondence sent to the attorneys general of California and Delaware in early January, underscoring the necessity for a transparent transactional process concerning OpenAI’s charitable assets to safeguard the public’s interest. Requesting clarification on the terms and timeline of the bidding process, Toberoff stressed the significance of ensuring a competitive bidding
