Elon Musk says he’ll withdraw $97.4B OpenAI bid if Sam Altman abandons for-profit plans

Elon Musk said he will drop his unsolicited $97.4 billion bid to take over OpenAI if the Sam Altman-led company agrees to suspend plans to restructure from nonprofit to for-profit entity, according to court records.

Musk’s attorneys outlined his position in a Wednesday filing as part of the xAI owner’s sweeping federal lawsuit against OpenAI, Altman and others. Musk has also asked a federal judge to halt OpenAI’s plans to restructure through a preliminary injunction.

“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 said.

The shocking bid from Musk and a group of blue-chip investors marked an escalation in his long-running legal war with OpenAI, which he co-founded in 2015 but exited after disagreements with Altman.

It also marks a major headache for OpenAI’s restructuring plans, which were already seen as complicated due to a bizarre corporate structure in which a nonprofit board oversees the company. OpenAI has said the nonprofit will continue to exist but won’t be in charge.

OpenAI argued in a separate filing that Musk’s shock takeover bid “further exposes” his request for a preliminary injunction “as an improper bid to undermine a competitor.”

Musk’s xAI directly competes with OpenAI.

OpenAI’s lawyers also claim that Musk’s offer to buy the company contradicts the original premise of his lawsuit.

“In this court, Musk argues that OpenAI Inc.’s assets cannot be ‘transferred away’ for ‘private gain’….but out of court, those constraints evidently do not apply, so long as Musk and his allies are the buyers,” the filing 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.”

Filed last year, Musk’s lawsuit names OpenAI, Altman, key investor Microsoft, billionaire Reid Hoffman and others as co-defendants.

The suit alleges that OpenAI abandoned its original goal of developing AI to benefit humanity while transforming from a “tax-exempt charity to a $157 billion for-profit, market-paralyzing gorgon.”

Musk also claims that he will suffer irreparable harm unless a judge grants an injunction stopping OpenAI’s restructuring plans.

US District Judge Yvonne Gonzalez Rogers, who is overseeing the case, called Musk’s claims about irreparable harm a “stretch” but said she would allow proceedings to go to trial so long as Musk appears to testify. The judge has yet to rule on the injunction.

Musk’s shocking $9.4 billion bid includes financing from prominent venture firms such as Joe Lonsdale’s 8VC, Valor Equity Partners, Baron Capital, Atreides Management and Vy Capital, and Endeavor CEO Ari Emanuel.

Musk’s attorney said his startup, xAI, could merge with OpenAI if a deal happens.

Altman has also flatly rejected the offer while stating that OpenAI was “not for sale.” He also personally blasted Musk, telling Bloomberg that “his whole life is from a position from insecurity” and that he doesn’t think Musk is a “happy person.”

“He obviously is a competitor,” Altman added. “I wish he would just compete by building a better product, but I think there’s been a lot of tactics, many, many lawsuits, all sorts of other crazy stuff, now this.”