Musk's $97 Billion OpenAI Bid Contingent on Non-Profit Status

Elon Musk's $97.4 billion bid for OpenAI's non-profit arm hinges on the artificial intelligence company remaining a non-profit entity, according to a court filing from Musk's lawyers reported by Reuters.

The consortium led by Musk seeks to acquire OpenAI's non-profit entity, a move that has drawn considerable attention in the AI industry. However, the billionaire's lawyers clarified in a Wednesday filing that the bid is contingent upon OpenAI halting its planned transition to a for-profit structure.

"If (the) OpenAI 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," the filing stated.

The lawyers further stipulated that if OpenAI proceeds with its for-profit transformation, "the charity must be compensated by what an arms-length buyer will pay for its assets." They emphasized that Musk's "serious offer" was intended to support the non-profit's original mission.

The move comes amidst a complex legal and financial battle surrounding OpenAI's planned restructuring. OpenAI's CEO, Sam Altman, has publicly rejected the bid, calling it "ridiculous," while also stating that the non-profit entity is not for sale.

Musk's involvement in this situation is further complicated by his ownership of a competing AI startup, xAI, launched in 2023. The conflicting interests have led to several analysts speculating that the bid, regardless of its outcome, will complicate OpenAI's efforts to become a for-profit entity.

The potential for unfair allocation of assets to OpenAI's non-profit arm has been a subject of scrutiny since Reuters first reported on the company's restructuring plans in September. Further complicating the situation are ongoing talks between SoftBank Group and OpenAI regarding a potential $40 billion funding round at a valuation of $300 billion, which could result in the non-profit holding a significant stake in the company.