Elon Musk will withdraw bid for OpenAI’s nonprofit if its board agrees to terms

In a court filing on Wednesday, a lawyer for Elon Musk said the billionaire will withdraw his $97.4 billion bid for OpenAI’s nonprofit if the ChatGPT maker’s board of directors “preserve the charity’s mission” and halt its conversion to a for-profit corporation.

The filing, submitted to the U.S. District Court for the Northern District of California, claims that Musk’s offer to buy OpenAI’s nonprofit is “serious,” and that the nonprofit “must be compensated by what an arms-length buyer will pay for its assets.”

“Should […] the charity’s assets proceed to sale, a Musk-led consortium has submitted a serious offer […] that would go to the charity in furtherance of its mission,” the filing reads. “[However, 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.”

The filing is the latest development in a saga that began on Monday, when Musk, his AI company, xAI, and a group of investors offered to buy the nonprofit that effectively governs OpenAI for $97.4 billion. OpenAI CEO Sam Altman and the company’s board quickly dismissed the unsolicited proposal. In a statement, Andy Nussbaum, the counsel representing OpenAI’s board, said Musk’s bid “doesn’t set a value for [OpenAI’s] nonprofit” and that the nonprofit is “not for sale.”

Musk, an OpenAI co-founder, last year brought a lawsuit against the company and Altman that alleges that OpenAI engaged in anticompetitive behavior and fraud, among other offenses.

OpenAI was founded as a nonprofit before it transitioned to a “capped-profit” structure in 2019. The nonprofit is the sole controlling shareholder of the capped-profit OpenAI corporation, which retains formal fiduciary responsibility to the nonprofit’s charter. OpenAI is now in the process of restructuring — this time to a traditional for-profit company, specifically a public benefit corporation. But Musk, via the lawsuit, is seeking to enjoin the conversion.

In a filing earlier on Wednesday, attorneys for OpenAI called Musk’s move to take control of the company “an improper bid to undermine a competitor,” and a contradiction of his position in court that a transfer of the startup’s assets through restructuring would breach its mission as a charitable trust.