Elon Musk has offered to retract his $97.4 billion bid to acquire OpenAI’s nonprofit entity—provided the organization’s board commits to upholding its original charitable mission and halts its transition into a for-profit corporation. According to a court filing submitted Wednesday in the U.S. District Court for the Northern District of California, Musk’s legal team asserts that his bid is legitimate and argues that OpenAI’s nonprofit must be compensated by what an arms-length buyer will pay for its assets.
The filing states that if OpenAI’s assets are officially put up for sale, Musk and a consortium of investors are prepared to make a serious offer, with proceeds benefiting the nonprofit’s mission. However, Musk is willing to withdraw his bid if OpenAI’s board agrees to abandon its transition to a for-profit model.
This development follows Musk’s initial proposal on Monday, when he, his AI startup xAI, and a group of investors put forward a $97.4 billion offer to purchase OpenAI’s nonprofit division. OpenAI CEO Sam Altman and the company’s board swiftly rejected the proposal. Andy Nussbaum, legal counsel for OpenAI’s board, stated that the bid does not establish a valuation for OpenAI’s nonprofit and reaffirmed that the nonprofit is not for sale. Musk, a co-founder of OpenAI, has been engaged in legal action against the company and Altman, accusing them of fraudulent activities and anticompetitive behavior.
OpenAI was originally established as a nonprofit but shifted to a capped-profit model in 2019. The nonprofit entity remains the sole controlling shareholder of OpenAI’s capped-profit division, overseeing its fiduciary responsibilities. Currently, OpenAI is undergoing another structural change—this time into a public benefit corporation. However, Musk is seeking a legal injunction to block this transition, arguing it contradicts OpenAI’s original mission.
Earlier on Wednesday, OpenAI’s legal team responded by characterizing Musk’s attempt to take over the nonprofit as an effort to undermine a competitor. They also pointed out that Musk’s bid contradicts his own legal claims that restructuring the organization would violate its status as a charitable trust.
