Elon Musk will withdraw his nearly $100 billion bid for OpenAI if it remains a nonprofit

(CNN) — Elon Musk says he is prepared to drop his attempt to buy OpenAI if the ChatGPT maker maintains its unusual current structure in which the world’s leading and most valuable AI company is operated by a nonprofit.

The battle for OpenAI, which has become deeply personal as it has spilled out into the public, pits Musk against rival OpenAI CEO Sam Altman in a bid for control of the future of AI. Musk announced Monday that he is leading a group of investors who have offered to buy OpenAI for $97.4 billion, but on Wednesday said he is prepared to drop the matter if OpenAI sticks with what Musk believes is its founding mission.

“If OpenAI, Inc.’s 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,” Musk said in a court filing late Wednesday. “Otherwise, the charity must be compensated by what an arm’s-length buyer will pay for its assets.”

Altman has lambasted the offer publicly, and the company in a court filing Wednesday questioned Musk’s rationale for the bid — though it has not yet rejected it.

The company in its filing Wednesday accused Musk of hypocrisy. Musk sued OpenAI in 2024 for allegedly violating its founding charter, and he demanded that the company remain under the control of a nonprofit. But in his bid, OpenAI noted Musk wants the company to be sold — to himself.

“In this Court, Musk argues that OpenAI, Inc.’s assets cannot be ‘transferred away’ for ‘private gain,’ the company said in a legal filing. “But out of court, those constraints evidently do not apply, so long as Musk and his allies are the buyers. Musk would have OpenAI, Inc. transfer all of its assets to him, for his economic benefit and that of his competing AI business and hand-picked private investors.”

A lawyer representing Musk did not immediately respond to a request for comment. A lawyer representing OpenAI said the company has stated OpenAI’s nonprofit is not for sale, and unlike a for-profit company, OpenAI has no obligation to consider Musk’s bid.

“The independent Board’s sole fiduciary duty is to the mission of ensuring AGI benefits all of humanity,” said Andrew Nussbaum, counsel to the OpenAI Board at Wachtell, Lipton, Rosen & Katz. “Respectfully, it is not up to a competitor to decide what is in the best interests of OpenAI’s mission.”

OpenAI is operated by a nonprofit organization that controls an entity called OpenAI LP, a for-profit company. That for-profit company took OpenAI from effectively worthless to a valuation of around $100 billion in just a few years — and Altman is largely credited as the mastermind of that plan and the key to OpenAI’s success.

OpenAI has announced plans to spin out its for-profit entity to give it more financial leeway. Musk, a cofounder of OpenAI who eventually left the company, claims that structure change would break with OpenAI’s founding charter, because it would focus on making a profit with its AI tools.

Musk has long feuded with Altman and has filed a number of legal complaints against both the company and Altman, claiming that the AI company and its leadership have misrepresented OpenAI as a philanthropy.

“OpenAI has gotten this far while having at least dual nonprofit/for-profit role. What they’re trying to do now is completely delete the nonprofit. And that seems really going too far,” Musk said in a Q&A session at the World Government Summit in Dubai Thursday morning. “This is analogous to if you fund a nonprofit to preserve the Amazon rainforest but instead they turn it into a lumber company and chop down trees and sell them for wood, you’d be like: ‘Wait a second, that’s the exact opposite of what I donated the money for.’”

Altman on Tuesday called Musk unhappy and insecure, and he speculated: “I think he’s probably just trying to slow us down.”

CNN’s Matt Egan contributed to this report.

This is a developing story and will be updated.

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