Elon Musk Withdraws $97.4 Billion Bid for OpenAI; Disputes AI Firm's For-Profit Transformation
In a recent development, Elon Musk has rescinded his $97.4 billion offer to acquire OpenAI, a non-profit organization that oversees ChatGPT. The decision follows a dispute with OpenAI CEO Sam Altman over the firm's plans to transition to a for-profit entity.
Musk's attorneys contend that Altman breached his fiduciary duty by unilaterally rejecting the takeover bid from an investor group led by Musk. They argue that the rejection occurred without the board's review.
The lawsuit stems from Musk's initial $45 million donation to OpenAI. He claims this donation was contingent on the organization remaining a non-profit. Despite Muk's offer, OpenAI's current valuation is estimated at $260-$300 billion, significantly above his bid.
In response to Musk's withdrawal, Altman has stated that OpenAI will not sell to Musk, but will instead consider an offer of $9.74 billion for Twitter, which he purchased in 2022. Musk has subsequently called Altman a "swindler."
OpenAI has filed a legal document stating that Musk's takeover bid contradicts his claim that the organization's assets should not be used for profit. The case is expected to go to trial in 2027.
Musk's dispute with OpenAI highlights the growing tension between the two parties. Previously, Musk had criticized OpenAI's joint venture with Oracle and SoftBank, alleging they lacked the necessary funding.
Despite the ongoing legal battle, both Musk and OpenAI remain committed to the development of AI technology. Musk has expressed his desire to compete with OpenAI through his own AI company, xAI. Altman, however, has accused Musk of "tactics" and "crazy stuff" to slow down OpenAI's progress.
The outcome of the lawsuit will determine the future of OpenAI and its relationship with Elon Musk.