Musk has set his sights on a new acquisition, leading a group of investors in an attempt to purchase OpenAI for $97.4 billion.
Musk was one of the original co-founders of OpenAI, helping establish the non-profit’s mission of safe AI development. Although Musk eventually left the company, he has continued to play a role in its development, most notably launching a legal challenge to its plans to convert to a for-profit. The tech exec claims that OpenAI has abandoned its original mission and is using the millions he initially invested in it as the legal basis to challenge its plans.
According to The Wall Street Journal, Musk’s latest effort to stymie OpenAI’s for-profit transition is a significant escalation, leading a consortium of investors that have submitted a purchase offer of $97.4 billion. The offer was delivered by Marc Toberoff, Musk’s attorney.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk said in a statement. “We will make sure that happens.”
OpenAI Sam Altman was quick to respond via X (Twitter):
OpenAI’s Increasingly Difficult Path Forward
Musk’s offer is unwanted drama for the AI firm, but underscores the growing challenges it faces transitioning to a for-profit. The “Godfather of AI,” Geoffrey Hinton, has expressed his support of Musk’s lawsuit, saying OpenAI is reneging on its founding principles.
“OpenAI was founded as an explicitly safety-focused non-profit and made a variety of safety related promises in its charter. It received numerous tax and other benefits from its non-profit status. Allowing it to tear all of that up when it becomes inconvenient sends a very bad message to other actors in the ecosystem.”
Similarly, n a statement to WPN, Robert Weissman, co-president of Public Citizen, emphasized the issues involved in OpenAI’s transition, as well as the role Musk’s bid now plays in them.
“Elon Musk is right that OpenAI has abandoned its nonprofit mission and risks illegitimately pulling money out of the nonprofit sector,” Weissman said.
“Nonprofits aren’t for sale. Musk and his affiliates could purchase control of OpenAI For Profit, or they could purchase control of all of OpenAI Nonprofit’s assets. In either instance, the question would remain of where and how the proceeds should be allocated.
“This is the exact question that Public Citizen has raised with the California and Delaware attorneys general. OpenAI Nonprofit and the nonprofit’s board, have failed to uphold their mission, and the funds from the sale of OpenAI For Profit should be allocated to a new charitable foundation to carry out OpenAI’s original purpose.
Weissman goes on to say that Musk’s offer helps establish the value of a potential spin off of a for-profit OpenAI.
“If Musk’s offer is legitimate, it sets a price on what OpenAI For Profit must pay to the nonprofit sector as part of its spin off, if that proceeds,” Weissman continued.
“OpenAI has created an impossible tangle through a complicated corporate structure and abandonment of its nonprofit mission.
“The path forward is for the California and Delaware attorneys general to step in the breach to protect the charitable sector, with these factors in mind: 1) There must be fair compensation for the sale of OpenAI’s assets; 2) the proceeds must go to an independent entity, not under the control of the fatally comprised OpenAI Nonprofit board; 3) in the sale, efforts should be made to promote market competition; 4) special protections should be put in place so that if OpenAI develops Artificial General Intelligence, the technology is shared broadly and responsibly and not allowed to be monopolized.”
Conclusion
Altman is clearly striking a defiant tone in response to Musk’s bid, but it remains to be seen how things will develop in the coming weeks. The company’s most recent round of funding included clauses that it transition to a for-profit within two years, or else it would be required to return the investment. Needless to say, at the rate the firm burns through cash, returning billions in investment would be a devastating—if not impossible—proposition.
If Musk can continue to challenge OpenAI’s for-profit plans, all the while dangling a nearly $100 billion carrot in front of the company, it’s entirely feasible its defiant stance may eventually soften.
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