Openai’s board on Wednesday questioned the rationale for a $97.4 billion bid from Elon Musk and others, gaining control of a well-known artificial intelligence company.
On Monday, a consortium of investors led by Musk offered to buy assets from the nonprofit that controls the company, setting a long-standing feud between Musk and Open CEO Sam Altman. It escalated.
In a court filing Wednesday, the company said Musk’s bid was inconsistent with legal claims made by the billionaire in a lawsuit filed against Openai last year. Openai alleged that Musk in his lawsuit stated that the assets must remain nonprofits and cannot be transferred to another entity in the public interest.
The company essentially denounces Musk for hypocrisy. In his lawsuit, he argued that Openai must be controlled by a nonprofit organization. Now Openai claims he is insisting the opposite.
The Openai Board has not yet officially refused bids.
Marc Toberoff, a Los Angeles lawyer who filed a lawsuit against Openai on Musk’s behalf, said in a statement to the New York Times Wednesday: It’s about Sam Altman and the open misconduct. ”
Musk will withdraw his bid if Openai’s board is ready to stipulate that charity assets are signed off “for sales” by so-called “conversion,”” Toberoff added. He added, referring to Openai’s efforts to cut off efforts. Nonprofit control. “But of course Openai never does that.”
Musk’s bid from the consortium could separate Altman’s nonprofit committee and complicate Altman’s efforts to raise the billions of dollars needed for Openai to build new technology There is.
For more than a year, Altman and his colleagues have been working on plans to shift the company’s management from nonprofits, including Microsoft and investment firm Thrive Capital, to Openai investors.
Openai is negotiating a $40 billion funding agreement led by Japanese conglomerate SoftBank. According to three people with knowledge of the transaction who spoke anonymously, the new funding round treasures Openai at $300 billion.
The San Francisco company’s unusual corporate structure provided an opening for Musk to interfere with its plans and make the Openai remodel more expensive.
To separate from the nonprofit committee, Altman and his colleagues must provide compensation. Openai may, for example, pay a one-time fee to a nonprofit or give a minority stake to the company.
However, non-commercial assets are not given value. Musk is trying to set one, and his offer could mean that Openai’s for-profit division must spend more to gain independence from the old nonprofit.
The clock is ticking by to change the way Openai works. Under the terms of Openai’s final investment round, the company’s management must be shifted from nonprofit organizations within two years. Otherwise, the funds will be converted into debt, according to documents reviewed by the New York Times.
(Times sued Openai and Microsoft, alleging that it infringes copyright infringement of news content related to AI systems. Both companies denied the allegations in the lawsuit.)
Musk’s offensive move is the latest in a very personal battle with Altman, which began as a partnership 10 years ago. They were part of the group that founded Openai as a nonprofit in 2015, and said they wanted to share technology freely with the world.
When Musk left the organization three years later after a fight for control, Altman attached Openai to a commercial enterprise, allowing him to collect the enormous amounts needed to build AI technology.
In late 2023, the nonprofit committee suddenly fired Altman and said he didn’t trust him to build AI for the benefit of humanity. This is one of the principles of nonprofit organizations.
He returned to the company in just five days and began stacking up allies and boards, exploring ways to cut control over nonprofits. If they cut control of the nonprofit, Altman and his allies believed the opening would be more appealing to investors.
Before the bid to be released Monday, Musk moved to block changes to the open’s management structure in a lawsuit filed in federal court last year.
