Elon Musk and a group of investors offered $97.4 billion to OpenAI with the intention to buy the non-profit organisation. The comes after years of back and forth between Musk and Sam Altman. Musk co-founded OpenAI in 2015 but left in 2018 after disagreements over the company’s direction.
Musk thinks OpenAI moved away from its original mission of developing AI for the public good, and that they now only value profits. For this, he ended up suing the startup. Altman and OpenAI have dismissed Musk’s bid, with Altman responding on X, “no thank you but we will buy twitter for $9.74 billion if you want.”
OpenAI has really grown into a leader in the industry, and has since its launch brought in billions in investments. Musk’s attempt to buy the company is seen as his way to regain control over a project he helped start but later abandoned.
What Is Musk’s Argument Against OpenAI?
Musk and his legal team argue that OpenAI has turned into a commercial enterprise instead of the nonprofit research organisation it was meant to be. Musk has pointed out that OpenAI’s shift towards making money could mean it no longer acts in the public’s interest. His lawsuit claims that the company’s leadership has broken its original promises.
The legal battle has been going on for months now, with Musk first filing a lawsuit in California state court before taking the matter to federal court. His legal team has also asked government officials in California and Delaware to monitor OpenAI’s actions to ensure that any changes to its structure meet legal requirements.
Musk’s argument is that if OpenAI wants to become fully for-profit, then its non profit side must be properly compensated. This means OpenAI’s leadership would need to pay the fair market value for the non profit’s assets before moving forward with any changes.
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How Has OpenAI Responded?
OpenAI has made it clear that it has no interest in Musk’s bid. The company has been raising funds from other investors, including a $40 billion deal with SoftBank that could push its valuation to $300 billion. If this deal goes through, OpenAI would join the ranks of the world’s most valuable private companies.
Altman has strengthened his control over OpenAI by bringing in allies to the board and making it that the non profit still holds legal authority over the company. While Musk’s offer puts pressure on OpenAI, it is unlikely to succeed unless Altman and the board decide to sell.
A judge recently questioned whether Musk’s claims of harm were strong enough to justify stopping OpenAI’s transition. While the case is moving towards trial, it is uncertain whether Musk’s legal actions will change OpenAI’s course.
Will This Battle Continue?
Musk’s bid has made OpenAI’s plans a bit more complex to work through. If OpenAI’s non profit board decides to separate from the for-profit company, it will need to determine the exact value of its assets. Musk’s offer could influence this process by establishing a price that OpenAI must consider.
The legal fight is expected to continue, with a judge allowing the case to move to trial next year. Meanwhile, OpenAI is going ahead with its plans to grow regardless, securing investment deals and refining its corporate structure.
