Elon Musk Withdraws $97.4 Billion Bid for OpenAI Over Profit Motive Concerns

Amidst a protracted dispute, Elon Musk has withdrawn his $97.4 billion bid for the non-profit organization overseeing OpenAI. Musk's decision hinges on the condition that OpenAI's directors halt the transformation of the ChatGPT maker into a for-profit enterprise.

Musk's withdrawal is a direct response to OpenAI CEO Sam Altman's unilateral rejection of the takeover bid. Musk's lawyers argue that Altman breached his fiduciary duty by dismissing the offer before the OpenAI board could review it.

Background of the Feud

Musk and Altman co-founded OpenAI in 2015 as a non-profit dedicated to advancing artificial intelligence research. However, Musk left the organization due to disagreements over its direction and established a rival AI company called xAI.

Altman has since proposed transitioning OpenAI into a for-profit model, triggering a legal battle with Musk. Musk claims his initial $45 million donation to OpenAI was contingent on the organization remaining non-profit.

OpenAI's Valuation and Musk's Revised Offer

Japanese conglomerate SoftBank plans to invest $40 billion in OpenAI, potentially valuing the organization between $260 billion and $300 billion. In contrast, Musk's $97 billion offer falls significantly short of this valuation.

Conflict Escalates

Altman publicly rejected Musk's bid, prompting Musk to label Altman a "swindler." Musk's lawyers allege that Altman's rejection constitutes a breach of his fiduciary duty and demonstrates his "adverse domination of the Board."

OpenAI maintains that Musk's bid contradicts his previous claims that the organization's assets should not be used for profit. A California federal district judge predicts the courtroom battle will extend into 2027.

Public Spat and Altman's Response

The feud between Musk and Altman has escalated in recent months, including public exchanges on Twitter and accusations of malicious tactics. Altman suggests that Musk's interest in disrupting OpenAI stems from his rivalry with xAI.

Musk's Latest Statement

Speaking at the World Governments Summit in Dubai, Musk expressed concern over OpenAI's move to abandon its non-profit status. He stated that it "seems to be really going too far."