Elon Musk Threatens to Withdraw $97.4 Billion Offer for OpenAI Nonprofit

In a court filing on Wednesday, Elon Musk’s legal team revealed that the billionaire is prepared to withdraw his $97.4 billion bid for OpenAI’s nonprofit arm under one condition: the ChatGPT maker’s board of directors must “preserve the charity’s mission” and pause its transition to a for-profit corporation.

The filing, submitted to the U.S. District Court for the Northern District of California, emphasizes that Musk’s offer is “serious,” arguing that OpenAI’s nonprofit should “be compensated by what an arms-length buyer will pay for its assets.” According to the document, Musk’s consortium would only proceed with the bid if the nonprofit’s assets were sold to further its charitable goals.

“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 filing states. “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.”

This court filing is the latest twist in an escalating conflict. On Monday, Musk, his artificial intelligence company xAI, and a group of investors made an unsolicited $97.4 billion offer to acquire OpenAI’s nonprofit. OpenAI CEO Sam Altman and the company’s board quickly dismissed the bid, with the board’s counsel Andy Nussbaum releasing a statement calling Musk’s proposal inappropriate. Nussbaum stated that the offer “doesn’t set a value for [OpenAI’s] nonprofit” and emphasized that the nonprofit “is not for sale.”

Musk, who co-founded OpenAI in 2015, has a contentious history with the organization. Last year, he filed a lawsuit against OpenAI and Altman, accusing them of anticompetitive practices, fraud, and other offenses. OpenAI originally launched as a nonprofit but shifted to a “capped-profit” model in 2019. The nonprofit still formally controls the capped-profit OpenAI corporation, which is responsible for aligning with the nonprofit’s mission. Recently, OpenAI announced intentions to restructure into a traditional for-profit public benefit corporation, a move Musk is attempting to block through legal action.

In a separate filing earlier on Wednesday, OpenAI’s attorneys described Musk’s takeover attempt as “an improper bid to undermine a competitor” and pointed out the contradiction in his legal arguments. They argued that Musk’s sudden interest in purchasing the nonprofit conflicts with his claim that restructuring OpenAI’s assets would violate its charitable trust obligations.

The legal battle continues to unfold, with both sides entrenched in their positions. For now, the fate of OpenAI’s nonprofit and its mission hangs in the balance.