Sam Altman has made it clear that an Elon Musk-led attempt to take control of OpenAI is not up for discussion. In a letter to OpenAI staff on Monday, the CEO put the words “bid” and “deal” in scare quotes, emphasizing that the company’s board has no interest in the offer.
“Our structure exists to ensure that no individual can take control of OpenAI,” Altman wrote, according to sources familiar with the letter. “Elon runs a competitive AI company, and his actions are not about OpenAI’s mission or values.”
Altman also informed employees that OpenAI’s board, on which he serves, has not received an official offer from Musk or his investors. If and when it does, the board intends to reject it, sources say. Internally, OpenAI employees reacted to the news with a mix of concern and frustration.
The tech world was stunned on Monday when a group of investors led by Musk made an unsolicited bid to acquire all of OpenAI’s assets for $97.4 billion. Musk’s AI startup, xAI, is backing the offer along with Valor Equity Partners, a private equity firm led by Musk’s close adviser Antonio Gracias. Gracias previously advised Musk on his Twitter acquisition in 2022 and has been involved in other business ventures with him.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk said in a statement through his lawyer Marc Toberoff. “We will make sure that happens.”
Musk has sued OpenAI multiple times, alleging that the company strayed from its nonprofit roots by shifting to a for-profit model. In response, OpenAI released emails suggesting that Musk was aware the company would need to become for-profit to pursue artificial general intelligence and even tried to merge OpenAI with Tesla.
This battle between Musk and Altman puts a spotlight on OpenAI board chair Bret Taylor, who also chaired Twitter’s board when Musk acquired the social media platform. That acquisition was relatively straightforward since Twitter was a public company with a clear fiduciary duty to maximize returns. Although Musk initially attempted to back out, his advisers persuaded him to proceed with the deal under the original terms. Taylor did not respond to a request for comment from WIRED.
OpenAI’s structure is more complex. The company is currently a nonprofit with a for-profit subsidiary but is transitioning to a public benefit corporation, requiring it to establish a valuation for its assets. OpenAI is presently valued at $157 billion, with ongoing talks for a $40 billion investment led by SoftBank that could increase its valuation to $300 billion.
While OpenAI’s nonprofit board doesn’t have a fiduciary responsibility to maximize returns for investors, it must negotiate a fair valuation for its assets to support its nonprofit goals. If the board were to accept a lower offer from Altman or a company he controls, it could be seen as breaching its fiduciary duty since Altman is considered an insider, according to Samuel D. Brunson, a nonprofit law expert at Loyola University Chicago. OpenAI did not respond to WIRED’s request for comment.
“Elon’s bid establishes a floor for the value of those assets,” Brunson noted. “At the very least, it makes it much more complicated for OpenAI to spin off the assets into a for-profit controlled by Sam Altman.”
However, Brunson also pointed out that the board will consider whether Musk is likely to follow through on the offer. “Given his track record with Twitter, where he had to be forced to come up with the money he pledged, there may be skepticism that he will do what he says,” Brunson explained.
Altman has expressed doubts internally, telling those close to him that Musk has a history of overplaying his hand, sources say.
In an interview with Bloomberg on Tuesday, Altman reinforced that belief. “Elon tries all sorts of things for a long time,” he said. “I think he’s probably just trying to slow us down.”
On X, Altman put it even more bluntly: “No thank you but we will buy Twitter for $9.74 billion if you want.” Musk responded with one word: “Swindler.”
Source: Swifteradio.com
