Musk sets condition for withdrawing $97B OpenAI takeover bid
What's the story
Elon Musk has shown his readiness to pull out his $97.4 billion offer for OpenAI's non-profit, provided the board of directors complies with certain conditions.
These include preserving the charity's mission and halting its shift into a for-profit organization, according to a court filing on Wednesday.
The document was filed with the US District Court for the Northern District of California by Musk's attorney.
Bid details
Musk's bid is 'serious'
The court filing stresses that Musk's attempt to buy OpenAI's non-profit is "serious."
It proposes that the nonprofit "must be compensated by what an arms-length buyer will pay for its assets."
The document adds, "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."
Rejection response
OpenAI's board rejects Musk's bid
OpenAI CEO Sam Altman and the company's board quickly dismissed Musk's unsolicited bid.
OpenAI's board lawyer Andy Nussbaum said Musk's bid "doesn't set a value for [OpenAI's] non-profit" and claimed the non-profit is "not for sale."
The rejection comes after Musk, his AI company xAI, and a group of investors offered to buy the non-profit governing OpenAI for $97.4 billion on Monday.
Legal battle
Musk's lawsuit against OpenAI
Musk, a co-founder of OpenAI, had sued the company and Altman last year. The suit accuses OpenAI of anti-competitive behavior and fraud, among other things.
Responding to Musk's attempt to gain control over the company with his bid, OpenAI's lawyers called it "an improper bid to undermine a competitor."
They also argued it contradicts his court stance that transferring the start-up's assets via restructuring would violate its mission as a charitable trust.
Consortium members
Musk's consortium and OpenAI's dismissal of claims
The Musk-led consortium includes his AI start-up xAI, Baron Capital Group, Emanuel Capital, among others.
In August 2024, he refiled a lawsuit accusing OpenAI of putting profits over AI safety, even alleging racketeering.
However, OpenAI has dismissed Musk's legal claims as baseless. They argue that he is simply envious of the company's success since his departure in 2018 after an unsuccessful bid to merge OpenAI with Tesla.
Injunction and valuation
Musk's injunction request and OpenAI's valuation
In November 2024, Musk asked a US District judge for a preliminary injunction to stop OpenAI from going for-profit.
Despite the legal tussles, OpenAI was valued at $157 billion in its last funding round, making it one of the world's most valuable private companies.
Now, SoftBank Group is in talks to lead a funding round of up to $40 billion in OpenAI at an estimated $300 billion valuation, including the new money.