Javier Márquez
WriterI've been in media for over a decade, but I've been marveling at the possibilities that technology brings us much longer. I believe we live in a world where the digital revolution is changing everything and that Xataka is the best place to write about it.
Tesla CEO Elon Musk recently launched a bid of $97.4 billion for the nonprofit organization that oversees OpenAI. This unexpected takeover proposal could potentially hinder CEO Sam Altman’s plan to turn OpenAI’s commercial division into a public-benefit corporation. This would further distance it from the nonprofit entity’s control.
For this restructuring to take place, OpenAI would need to compensate the nonprofit. The problem is that the nonprofit’s value isn’t clearly known. However, OpenAI has previously indicated that part of the process would involve receiving “shares in the PBC at a fair valuation determined by independent financial advisors.”
Musk’s Actions and the Value of OpenAI
According to Bloomberg, OpenAI has been considering compensating the nonprofit with a 25% stake in its commercial division. Given the company’s valuation of $157 billion, this stake would equate to around $40 billion. In comparison, this amount is significantly less than the bid made by the Musk-led investor group.
Altman’s legal team quickly exposed Musk’s intentions in court. Attorney Jordan Eth says that Musk can’t attempt to acquire the nonprofit while simultaneously working to prevent OpenAI’s transformation into a PBC through legal channels. Musk and Altman are currently in a complex court battle with no clear resolution.
For their part, Musk’s lawyers say that their client will withdraw the takeover bid if OpenAI’s board agrees to “preserve the charity’s mission and stipulate to take the ‘for sale’ sign off its assets by halting its conversion.” This ultimatum places additional pressure on Altman, who likely didn’t expect to find himself in this situation.
The New York Times emphasizes that OpenAI must proceed with its plan. According to documents obtained by the outlet, the terms of its latest investment round stipulate that the conversion must be completed within two years. If this isn’t accomplished, the financing will be converted into debt. Additionally, Musk is open to increasing his bid if comparable proposals are available.
Image | Steve Jurvetson
Related | Elon Musk Isn’t Just Influencing NASA. He’s Starting to Dominate It
Log in to leave a comment