Elon Musk revealed in a court filing on Wednesday evening that he would withdraw his $97.4 billion bid for control of OpenAI if the company abandons its long-standing efforts to alter its organizational structure.
On Monday, Musk, alongside a group of investors, proposed a plan to acquire the non-profit assets of OpenAI, escalating his years-long dispute with OpenAI CEO Sam Altman over the future direction of artificial intelligence. Altman is working to restructure OpenAI by shifting control from the non-profit entity to investors, including Microsoft.
However, just two days later, the OpenAI board questioned Musk's rationale behind the bid and accused him of hypocrisy. Hours later, Musk's legal team responded via new court documents, stating that they would abandon the bid if the OpenAI board agrees to preserve the mission of the non-profit organization and cancels plans to sell it.
The discord between Musk and Altman stems from personal conflicts. Back in 2015, Musk co-founded OpenAI with Altman and others as a non-profit organization. By 2018, after failing to secure control, Musk left the organization while Altman transformed OpenAI into a for-profit company to raise the substantial funds needed for AI development. Despite this change, the non-profit entity retained control over the company.
Last year, Altman and his team began devising plans to transfer control from the non-profit entity to OpenAI’s investors. Musk's bid could complicate these plans.
To achieve separation from the non-profit board, Altman and his team must offer compensation, such as paying fees to the non-profit or granting it a minority stake in the company.
Currently, the non-profit organization's assets remain unvalued. Musk's bid attempts to establish a valuation, which may mean the for-profit segment of OpenAI will need to pay more to break free from the non-profit's control.
However, OpenAI is unlikely to abandon its plan to separate from the non-profit. According to the terms of the last round of investment, it must complete the transfer of control within less than two years. Otherwise, as per documents reviewed by The New York Times, its funding will convert into debt.
In addition, Musk has filed a lawsuit against OpenAI in an attempt to block its restructuring plans.
