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Elon Musk will not pursue his attempted purchase of OpenAI if the company maintains its original structure as a charity, according to a court filing released on Feb. 12 late in the day. The statement followed OpenAI’s plan to create a capped-profit branch, a move Musk said goes against the original goals of the organization he helped create.
Musk proposed a $97.4 billion unsolicited takeover of OpenAI earlier in the week. It’s a similar maneuver to his 2022 purchase of Twitter.
To profit or not to profit, that is the question
OpenAI’s corporate structure is unusual. Two for-profit entities, OpenAI GP LLC and OpenAI Global LLC, are owned by OpenAI, Inc, the nonprofit dedicated to “ensuring that safe artificial intelligence is developed and benefits all of humanity.”
In September 2024, OpenAI announced it would restructure so the nonprofit has a minority stake in the for-profit companies. Altman will begin to receive equity from the company.
Musk and Altman feud has shaped generative AI for a decade
Musk co-founded OpenAI with Altman in 2015, but the two diverged philosophically. Musk has since founded his own AI company, x.AI, but he has never taken his eyes off the ChatGPT maker and its stated mission.
“What they’re trying to do now is completely delete the nonprofit,” Musk said at the World Government Summit in Dubai on Feb. 13, according to a video from Bloomberg. “That seems really going too far.”
“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 the court filing acquired by CNN. “Otherwise, the charity must be compensated by what an arm’s-length buyer will pay for its assets.”
Sam Altman and the OpenAI legal team allege Musk’s case is hypocritical.
“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,” OpenAI said in an anonymous statement in the legal briefing.
“I wish he would just compete by building a better product, but I think there’s been a lot of tactics,” Altman said of Musk in an interview at the Paris AI Action Summit on Feb. 11, as recorded by Bloomberg Television. “Many, many lawsuits, all sorts of other crazy stuff, now this. And we’ll try to just put our head down and keep working.”
OpenAI announced its much-anticipated GPT-5 on Feb. 12 but did not specify a release date.
Ties to the U.S. government on both sides
Musk’s role as executive of the U.S. government contractor group Department of Government Efficiency has made him one of the most powerful men in the country and opened up a host of possible conflicts of interest between the feds’ handling of technology and Musk’s several companies. OpenAI signed on to non-binding government AI safety and regulation initiatives with the previous administration and offers a product specifically for government agencies.