The public showdown between Elon Musk and OpenAI Chief Executive Officer Sam Altman over Musk’s $97.4 billion bid for the artificial intelligence startup is heating up in court.
In a filing Wednesday, Altman said Musk’s all-cash offer undermines the very claim at the heart of his lawsuit against OpenAI – that its assets can’t be “transferred away” for “private gain.” The world’s richest person has sued Altman to thwart OpenAI’s plan to convert to a for-profit entity.
Musk fired back at Altman with his own filing, saying he would drop his bid for OpenAI altogether if the startup remained a charity.
The legal battle between the two billionaires over OpenAI’s structure began last year. They now await a ruling by US District Judge Yvonne Gonzalez Rogers on Musk’s request to halt OpenAI’s restructuring plans, while he pursues claims that the startup’s relationship with Microsoft Corp. violates antitrust law.
‘Improper Bid’
The unsolicited Feb. 10 offer by Musk and a coalition of deep-pocketed investors to acquire OpenAI shows that his request for a court order immediately blocking OpenAI’s conversion to a for-profit business is “an improper bid to undermine a competitor,” according to Altman’s filing in federal court in Oakland, California.
Altman has spurned the buyout offer, saying OpenAI is “not for sale,” and called the overture by Musk, who owns rival startup xAI, an attempt to “slow us down.”
In response to Altman’s filing, Tesla’s CEO told the court he would drop his bid for OpenAI if the startup halts its restructuring. Altman rejected the proposal before OpenAI’s board had even seen it, Musk said. That is a breach of fiduciary duty, he argued.
If OpenAI’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’s lawyers said in their filing.
“Otherwise, the charity must be compensated by what an arms-length buyer will pay for its assets,” they said.
OpenAI has said shifting from a nonprofit charity to a commercial business is critical to securing the vast amount of funding the ChatGPT maker needs to fulfill its mission of creating artificial general intelligence, or AGI, to benefit humanity.
Skeptical Judge
Rogers signaled at a Feb. 4 hearing that she wasn’t convinced she needs to take immediate action against OpenAI. She said she was reluctant to issue such an order in a “billionaires versus billionaires” case and called Musk’s argument that he faces “irreparable harm” a “stretch.”
The judge said she will probably let Musk take OpenAI to trial – and require him to testify – over at least some of his claims. Lawyers told her the earliest a trial could take place is in late 2026.
According to OpenAI’s filing, Musk’s move to take control of OpenAI contradicts his position in court that a transfer of the startup’s assets through restructuring would breach its mission as a charitable trust.
“Out of court, those constraints evidently do not apply, so long as Musk and his allies are the buyers,” OpenAI said. “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.”
The case is Musk v. Altman, 24-cv-04722, US District Court, Northern District of California (Oakland).
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
