Audacious Bid to Buy OpenAI Assets
A group of investors led by Elon Musk has made a $97.4 billion bid to buy the assets of the nonprofit that controls OpenAI, according to two people familiar with the bid, escalating a yearslong, deeply personal tussle for the future of artificial intelligence between Mr. Musk and OpenAI’s chief executive, Sam Altman.
The Consortium
The consortium includes Vy Capital and Xai, Mr. Musk’s artificial intelligence company, as well as the Hollywood power broker Ari Emanuel and other investors, said the people, who spoke on the condition of anonymity because the discussions are ongoing.
The Bid
The bid for OpenAI is Mr. Musk’s latest and perhaps most audacious attack on an organization that he helped create almost 10 years ago. It faces long odds: OpenAI’s board of directors is closely allied with Mr. Altman, and the chief executive quickly mocked Mr. Musk’s bid.
OpenAI’s Response
“No thank you but we will buy Twitter for $9.74 billion if you want,” Mr. Altman said on X, referring to the old name for Mr. Musk’s social media platform.
“Swindler,” Mr. Musk replied.
Complications and Consequences
OpenAI has not yet seen the bid, according to a person familiar with OpenAI’s potential response. Mr. Musk’s unsolicited offer could complicate OpenAI’s attempt to complete a $40 billion fund-raising deal that would nearly double the high-profile company’s valuation from just four months ago.
OpenAI’s Structure
OpenAI’s structure is remarkably complex — and Mr. Musk’s bid shows that he understands its weak points. In order to separate from the nonprofit board, Mr. Altman and his colleagues must compensate it: OpenAI might pay the nonprofit a one-time fee, for instance, or give it a minority stake in the company.
Legal and Regulatory Issues
The board of OpenAI’s nonprofit has a duty to sell its assets at fair market value, said Ellen P. Aprill, a senior scholar studying nonprofit law at the University of California, Los Angeles, who has written extensively about OpenAI. Mr. Musk’s offer now appears to set that value very high, she said. If the nonprofit were to accept a lower price from OpenAI’s for-profit arm, it might have to explain to state charity regulators why it turned away a higher bid.
Regulatory Scrutiny
The proposal to shift OpenAI’s assets from the nonprofit to the for-profit is already under scrutiny from state charity regulators in Delaware, where OpenAI is incorporated, and in California, where the company has its headquarters.
Conclusion
The bid by Elon Musk and his investors to buy the assets of OpenAI’s nonprofit is a significant development in the ongoing battle for control of the artificial intelligence company. The outcome of this bid will have significant implications for the future of OpenAI and the development of artificial intelligence as a whole.
FAQs
Q: What is the value of OpenAI’s assets?
A: The value of OpenAI’s assets has not been publicly disclosed.
Q: Who is leading the bid to buy OpenAI’s assets?
A: The bid is being led by Elon Musk and a consortium of investors, including Vy Capital and Xai.
Q: What is the significance of OpenAI’s nonprofit structure?
A: OpenAI’s nonprofit structure gives the organization a unique legal status, allowing it to operate independently and make decisions without the need for shareholder approval.
Q: What are the implications of Mr. Musk’s bid for OpenAI’s future?
A: The outcome of Mr. Musk’s bid will have significant implications for OpenAI’s future, including its ability to operate independently and make decisions about its own direction.
