In a court document filed on Wednesday, legal representatives for Elon Musk indicated that the billionaire will retract his $97.4 billion acquisition proposal for OpenAI’s nonprofit if the organization’s board of directors commits to maintaining its charitable objectives and ceases its shift toward becoming a for-profit entity.
The submission, made to the U.S. District Court for the Northern District of California, asserts that Musk’s offer to purchase OpenAI’s nonprofit is “genuine” and contends that the organization “should receive fair compensation based on what an independent buyer would pay for its assets.”
“If the charity’s assets are set to be sold, a consortium led by Musk has presented a legitimate offer… intended to benefit the charity and further its mission,” the document states. “However, if the Board of OpenAI, Inc. is willing to uphold the charity’s mission and agrees to remove the ‘for sale’ notice from its assets by halting the conversion, Musk will withdraw his offer.”
This filing marks the newest development in an ongoing situation that began on Monday when Musk, along with his AI venture xAI and a group of investors, proposed to acquire the nonprofit that essentially oversees OpenAI for $97.4 billion. OpenAI’s CEO, Sam Altman, and the board swiftly dismissed the unexpected proposal. In a statement, Andy Nussbaum, the attorney for OpenAI’s board, remarked that Musk’s proposal “does not correctly value [OpenAI’s] nonprofit” and asserted that the organization “is not for sale.”
Musk, who co-founded OpenAI, filed a lawsuit against the company and Altman last year, alleging various offenses, including anticompetitive practices and fraud.
Originally founded as a nonprofit, OpenAI shifted to a “capped-profit” model in 2019. The nonprofit acts as the exclusive controlling shareholder of the capped-profit OpenAI corporation, which maintains fiduciary responsibility toward the nonprofit’s charter. Currently, OpenAI is undergoing another restructuring to become a traditional for-profit organization, specifically a public benefit corporation. Musk, through his lawsuit, seeks to prevent this conversion.
In a previous filing on Wednesday, OpenAI’s attorneys described Musk’s effort to gain control of the company as “an improper bid to undermine a competitor,” pointing out the inconsistency with his courtroom stance, which argues that transferring assets through restructuring would violate the organization’s mission as a charitable trust.
Compiled by Techarena.au.
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