Tesla CEO Elon Musk has stated that he will retract his $97.4 billion acquisition offer for OpenAI’s nonprofit arm if the ChatGPT maker ceases its transition into a for-profit entity.
Elon Musk’s lawyers said in a filing that he would drop his $97.4 billion bid for the nonprofit that controls OpenAI, reported The Wall Street Journal on Thursday, if the board stops it from converting into a for-profit entity. OpenAI CEO Sam Altman has been working for several months to spin the ChatGPT maker into a for-profit company, however, the Musk-led unsolicited bid from earlier in the week could push the AI startup’s board to re-examine how they currently value the business. – LinkedIn News
This ultimatum was outlined in a legal filing submitted on Wednesday to the U.S. District Court for the Northern District of California.
Part of the filing reads,
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“If OpenAl, Board is prepared to preserve the charity’s mission and stipulate to tale the for sale’ sign off its assets by halting its conversion, Musk will withdraw the bid,” read the filing, which was submitted Wednesday to the U.S: District Court for the Northern District of California.
Recall that Musk earlier this week, along with his artificial intelligence company xAI and a consortium of investors, launched a bid to acquire OpenAI’s nonprofit arm for $97.4 billion, accusing the firm and its CEO Sam Altman of abandoning its original mission to develop AI for charity but pursuing profits instead.
Altman, however, dismissed Musk’s proposal, telling CNBC that he views the bid as an attempt to hinder OpenAI’s progress.
In a response to Musk’s bid, he wrote,
“No thank you but we will buy Twitter for $9.74 billion if you want”.
Musk responded to his tweet by describing him as a “swindler”.
Backstory
Musk, an OpenAI cofounder who eventually left the company, has long feuded with Altman and has filed a number of legal complaints against OpenAI, claiming that the AI company and its leadership have misrepresented OpenAI as a philanthropy.
Musk also accused the company of engaging in racketeering. Meanwhile, OpenAI accused the Tesla CEO of essentially being jealous that he was no longer involved in the startup after he left OpenAI in 2018 following an unsuccessful bid to convince his fellow co-founders to let Tesla acquire it.
OpenAI via a post on its website, released receipts, countering Musk’s claims by stating that the Tesla CEO not only wanted, but created, a for-profit as OpenAI’s proposed new structure.
“When he didn’t get majority equity and full control, he walked away and told us we would fail. Now that OpenAI is the leading AI research lab and Elon runs a competing AI company, he’s asking the court to stop us from effectively pursuing our mission,” part of the blog post reads.
OpenAI is operated by a nonprofit organization that controls an entity called OpenAI LP, a for-profit company that exists within the larger company’s structure. That for-profit company took OpenAI from effectively worthless to a valuation of around $100 billion in just a few years and Altman is largely credited as the mastermind of that plan and the key to the company’s success.
Musk Launches xAI to Rival OpenAI
Two years ago, Musk launched his artificial intelligence startup xAI, unveiling a team comprised of engineers from the U.S. technology firms that he hopes to challenge in his bid to build an alternative to ChatGPT.
Musk, who has aimed at the “woke mind virus” in society, has since accused the OpenAI’s chatbot ChatGPT, of being biased in favor of left-wing and politically correct views.
In an interview with former Fox News host Tucker Carlson, he disclosed that his Grok chatbot would be a “maximum truth-seeking AI that tries to understand the nature of the universe”.
In all of this, OpenAl has yet to publicly respond to Musk’s legal filing. However, Altman had previously stated that the company’s transition to a for-profit public benefit corporation is expected to take up to two years, which is necessary for scaling operations and attracting long-term investment.