A proposition of approximately $97.4 billion put forth by a group of investors spearheaded by Elon Musk to acquire OpenAI has been turned down, marking a significant escalation in an ongoing legal dispute with the artificial intelligence entity co-founded by Musk. Musk, in collaboration with his own AI venture, xAI, and a conglomerate of investment entities, aims to take charge of the company behind ChatGPT and revert it back to its original philanthropic purpose as a non-profit research laboratory. This revelation came to light through Musk’s legal representative, Marc Toberoff.
Upon learning of the offer, CEO of OpenAI, Sam Altman, promptly dismissed the proposal on Musk’s social media platform, X, retorting, “no thank you but we will buy Twitter for $9.74 billion if you want.” It is worth noting that Musk had acquired Twitter, now rebranded as X, for a sum of $44 billion in the year 2022. The tumultuous relationship between Musk and Altman, dating back to their joint inception of OpenAI in 2015, has been marred by disputes over leadership and the organization’s strategic direction, a conflict that intensified following Musk’s resignation from the board in 2018.
Having been an early investor and board member of OpenAI, Musk initiated legal action against the AI entity last year, initially in a state court in California and subsequently in federal court, alleging a deviation from its original altruistic objectives as a research institute dedicated to public welfare. Toberoff disclosed in court proceedings the extent of Musk’s financial contributions to the startup, totaling approximately $45 million from its inception until 2018.
The legal showdown between Musk and OpenAI unfolded in a federal court in California, as Musk sought judicial intervention to prevent the ChatGPT developer from transitioning into a for-profit entity. While Judge Yvonne Gonzalez Rogers has yet to render a decision on Musk’s plea, she expressed skepticism about the potential irreparable harm Musk claims he would suffer if OpenAI proceeds with its intended shift towards a for-profit structure. However, the judge raised concerns regarding OpenAI’s ties with its business associate, Microsoft, and indicated her willingness to allow the case to proceed to trial, possibly as early as the following year, to be adjudicated by a jury.
In addition to Musk and xAI, influential backers of the acquisition bid include 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 board remain steadfast in their pursuit of a full conversion to a for-profit enterprise, underscoring the necessity for the charity to be duly recompensed for the relinquishment of control over a technology deemed groundbreaking in contemporary times. Toberoff further asserted that Musk, as a co-founder of OpenAI and an accomplished figure in the tech
