Following Musk's announcement of a $97.4 billion bid to acquire the nonprofit organization overseeing ChatGPT's creator, the two parties remain in disagreement regarding the status of the formal proposal.
According to a source familiar with the situation, OpenAI's board of directors has not received a formal bid from Musk's group, as reported by Reuters on Tuesday, which adds to the uncertainty surrounding this unsolicited attempt to gain control of a leading AI company.
Musk's attorney, Marc Toberoff, informed Reuters that he emailed the offer to OpenAI's external counsel at Wachtell, Lipton, Rosen & Katz on Monday. The law firm has not yet responded to requests for comment.
The bid, which was included in an email, consisted of a "detailed four-page Letter of Intent" to acquire OpenAI's assets, signed by Musk and other investors, and directed to the board, according to Toberoff.
"Whether Sam Altman chose to provide or withhold this from OpenAI's other Board members is outside of our control," he stated, referring to OpenAI's CEO.
In response to inquiries about Musk's acquisition offer, Altman told Reuters on Tuesday that the nonprofit controlling OpenAI is not for sale. This offer from Musk's consortium comes as the billionaire seeks to prevent the artificial intelligence startup from becoming a for-profit entity.
"I have nothing to say. I mean, it's ridiculous," Altman said on the sidelines of an AI summit in Paris when asked about the offer.
"The company is not for sale. It's another one of his tactics to try to mess with us," Altman said, referring to Musk.
In a message to OpenAI employees on Monday, Altman noted that while the board had not formally reviewed the offer, it intended to reject it in alignment with OpenAI’s mission.
Musk co-founded OpenAI alongside Altman in 2015 as a nonprofit organization but departed prior to the company's significant growth due to disagreements regarding its strategic direction and funding approaches with Altman and other co-founders. In 2023, he established a rival AI venture, xAI.
As the CEO of Tesla and owner of the technology firm X, Musk is a close associate of former U.S. President Donald Trump. He heads the newly formed Department of Government Efficiency, which is focused on significantly reducing the size of the federal bureaucracy.
OpenAI is currently in the process of raising $40 billion and is also looking to shift from a nonprofit to a for-profit model, claiming this transition is necessary to secure the funding required for developing advanced AI models. This complex shift involves determining a valuation for OpenAI's nonprofit control over its for-profit division.
Delaware Attorney General Kathy Jennings has indicated that she is examining OpenAI's proposed changes to ensure compliance with its charitable objectives, prioritizing public benefit over the commercial interests of OpenAI’s directors or partners.
Legal analysts have noted that Musk's involvement complicates the valuation of OpenAI, especially concerning its charitable assets during this intricate corporate transition, which affects the compensation required for the nonprofit to relinquish control.
Robert Weissman, co-president of Public Citizen, a consumer advocacy organization, stated to Reuters, "It does help set a price point for the thinking about the valuation of the nonprofit assets. If it were to occur as proposed, the regulators have a duty to ensure that if there's a selloff of assets to a for-profit entity, that fair market value is obtained."