Elon Musk has proposed to withdraw his $97.4 billion offer for OpenAI nonprofit division, provided the company’s board abandons its transition towards a for-profit structure.
This was revealed in a court filing submitted to the U.S. District Court for the Northern District of California on Wednesday.
According to the filing, Musk’s offer to acquire OpenAI’s nonprofit entity is a “serious” bid, but he is willing to step back if the board ensures the organisation remains focused on its original charitable mission.
“Should […] the charity’s assets proceed to sale, a Musk-led consortium has submitted a serious offer […] that would go to the charity in furtherance of its mission,” the document states.
It further adds, “[However, if] OpenAI, Inc.’s 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 case over OpenAI’s governance escalated earlier this week when Musk, his artificial intelligence firm xAI, and a group of investors made an unsolicited bid to purchase the nonprofit.
The proposal was rejected by OpenAI’s leadership. Andy Nussbaum, the legal representative for OpenAI’s board, dismissed the offer, stating that it “doesn’t set a value for [OpenAI’s] nonprofit” and that the nonprofit “is not for sale.”
Elon Musk, a co-founder of OpenAI, has been engaged in legal issues with the organisation since last year. His lawsuit accuses OpenAI and CEO Sam Altman of breaching their fiduciary duty by prioritising commercial interests over the nonprofit’s original objectives.
OpenAI was established as a nonprofit entity but transitioned to a “capped-profit” model in 2019, which allowed it to attract external investment while still maintaining oversight by its nonprofit arm.
The company is now working towards another structural shift, this time into a public benefit corporation, a move that Elon Musk is opposing through his lawsuit.
In response to Musk’s latest legal manoeuvre, OpenAI’s legal team argued that his actions are an attempt to “undermine a competitor” and contradict his own legal position that transferring the company’s assets would violate its original charitable mission.
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