Musk's group to withdraw $97.4 billion OpenAI bid if non-profit status stays

A consortium led by Elon Musk will withdraw its $97.4 billion bid for OpenAI’s non-profit arm if the company halts its transition to a for-profit entity, Musk’s lawyers said in a court filing on Wednesday.

The filing states that Musk aims to block OpenAI from becoming a for-profit firm, a move the company considers essential to securing more capital.

"If (the) OpenAI 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," the filing stated. If not, "the charity must be compensated by what an arms-length buyer will pay for its assets."

The filing added that Musk’s offer is intended to further the non-profit’s mission.

Musk, who launched AI startup xAI in 2023, has sued to prevent OpenAI’s transition to a for-profit model.  OpenAI CEO Sam Altman said earlier this week that the non-profit controlling the company was not for sale, calling Musk’s bid "ridiculous."

Musk co-founded OpenAI with Altman in 2015 but left in 2018 over differences in direction and funding. Altman later became CEO and launched a for-profit unit within OpenAI, securing investment from Microsoft.

Altman is now working on a plan to restructure OpenAI into a for-profit firm that will no longer be controlled by its non-profit board. The non-profit will continue to exist and retain a stake in the for-profit company.

SoftBank Group is in talks to lead a funding round of up to $40 billion in OpenAI at a $300 billion valuation, including new funds. This could give the non-profit a significant stake in the company.