Today’s news is about the world’s richest person Elon Musk move to withdraw his $97.4 billion bid for OpenAI’s nonprofit. The news highlights the backstory of the bid, OpenAI’s response, and everything in between.
Elon Musk to Buy OpenAI's Nonprofit Organization
Elon Musk, the co-founder of OpenAI has offered to buy OpenAI’s nonprofit organization. His lawyer confirmed his offer in a court filing on Wednesday submitted to the U.S. District Court for the Northern District of California.
The court statement confirmed that Musk’s offer to buy OpenAI’s nonprofit is “serious,” and that the nonprofit “must be compensated by what an arms-length buyer will pay for its assets.”
The filing began on Monday, when Musk, his AI company, xAI, and a group of investors are ready to own the OpenAI’s nonprofit organization for $97.4 billion. The lawyer stated that Musk would pull out his bid if ChatGPT maker’s board of directors “preserve the charity’s mission” and halt its conversion to a for-profit corporation.
What Lies Behind the Bid?
Elon Musk was involved in a lawsuit against the company and its CEO, Sam Altman. He accused them of their anticompetitive behavior and fraud in the lawsuit. OpenAI was founded as a nonprofit but transitioned to a "capped-profit" structure in 2019. The company is now in the process of restructuring into a traditional for-profit company, which Musk is trying to block through the lawsuit.
OpenAI's Response
OpenAI CEO Sam Altman and the company’s board members dismissed Musk’s proposal. Andy Nussbaum, representing OpenAI’s board, stated that Musk’s bid “doesn’t set a value for [OpenAI’s] nonprofit” and that the nonprofit is “not for sale.” The company's attorneys have stated their opinion calling Musk's move "an improper bid to undermine a competitor".
What's Next for OpenAI?
OpenAI was founded as a non-profit and is now in the process of restructuring into a traditional for-profit company, specifically a public benefit corporation which is sure to be halted by Musk's plans.