Elon Musk sets condition to withdraw $97.4 billion OpenAI bid

• Elon Musk has offered to withdraw his $97.4 billion bid for OpenAI’s non-profit arm if the company halts its transition to a for-profit entity
• Musk, along with a consortium of investors, submitted a bid to acquire OpenAI’s non-profit arm to prevent the restructuring
• A court filing by Musk’s lawyers argues that if OpenAI proceeds with its restructuring, the non-profit must be compensated at fair market value

Tesla CEO Elon Musk has stated that he will withdraw his $97.4 billion bid for OpenAI’s non-profit arm if the company abandons its plan to transition into a for-profit entity.

This condition was outlined in a court filing submitted by Musk’s legal team on Wednesday, February 12.

“If the OpenAI board is willing to uphold the charity’s mission and formally agree to halt its conversion, Musk will withdraw the bid,” the filing stated.

However, if OpenAI proceeds with its restructuring, Musk’s legal team argues that the non-profit must be compensated with the market value of its assets.

The billionaire described his offer as a “serious bid” aimed at preserving OpenAI’s original mission.

Musk’s history with OpenAI

OpenAI was founded in 2015 as a non-profit by Elon Musk and Sam Altman, the company’s current CEO. 

However, Musk later exited the organisation due to disagreements over its strategic direction. 

Under Altman’s leadership, OpenAI launched a for-profit subsidiary to attract external investment, including a major partnership with Microsoft.

Altman is now spearheading a restructuring plan that would shift OpenAI’s core operations into a for-profit entity, leaving the non-profit arm with only a minority stake. 

In response, Musk has taken legal action to block the move, arguing that OpenAI’s assets should not be used for private financial gain.

Earlier this week, Musk led a consortium that submitted an offer to acquire OpenAI’s non-profit arm in an effort to stop the transition. 

Reports suggest that if the deal goes through, OpenAI could merge with Musk’s AI company, xAI.

The bid is backed by investors such as Valour Equity Partners, Baron Capital, Atreides Management, Vy Capital, Joe Lonsdale’s 8VC, and Ari Emanuel through his investment fund. Marc Toberoff, a lawyer representing the group, confirmed the offer but declined further comment.

OpenAI’s response

Sam Altman dismissed Musk’s proposal, telling Reuters on Tuesday, February 11, that the non-profit is “not for sale.” 

OpenAI has also pushed back against Musk’s bid, arguing that it contradicts his legal stance against the commercialisation of the organisation’s assets.

The conflict between Musk and Altman stems from a long-standing disagreement over OpenAI’s mission. 

Musk has accused the company of abandoning its original goal of open-source, safety-focused AI development in favour of profit-driven interests.

OpenAI has denied these claims, suggesting that Musk’s criticism is rooted in his unsuccessful attempt to bring the company under Tesla’s control.

Since its founding, OpenAI has secured billions in external funding, including a $13 billion investment from Microsoft. 

In a revised lawsuit filed in August, Musk accused OpenAI of forming a monopoly with Microsoft, alleging that their partnership is designed to suppress competition from companies like xAI.

The lawsuit, now expanded to 26 legal claims over 107 pages, highlights the deepening rift between Musk and his former company.

Elon Musk's xAI reportedly set to launch ChatGPT rival

Meanwhile, TheRadar earlier reported that Elon Musk’s artificial intelligence company, xAI, was reportedly on the verge of unveiling a chatbot application designed to rival OpenAI’s ChatGPT. 

The app, which could launch in December, marks a significant step in Musk’s ongoing competition with the AI giant he co-founded before departing in 2018.