Musk Calls on State Attorneys General to Facilitate Auction of OpenAI Stake Amid Restructurings

Science & Technology Science

Posted by admin on 2025-01-10 10:59:16 |

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Elon Musk’s lawyerhas urged the attorneys general of California and Delaware to press OpenAI toauction a significant stake in its business, aiming to determine the fairmarket value of its charitable assets as the company undergoes a corporaterestructuring. Sources familiar with the matter told Reuters that Musk'sattorney, Marc Toberoff, sent a letter to the state law officers on Tuesday,advocating for a competitive bidding process to safeguard the public's interestas OpenAI works to remove control of its nonprofit arm.

Toberoff argued thatthe auction would help ensure the fair valuation of OpenAI’s charitable assets.In response, OpenAI's spokesperson stated, “Elon is engaging in lawfare. Weremain focused on our mission and work.” The company previously announced thatindependent financial advisors would assess the value of its charitable assets.

OpenAI, co-foundedby Musk and Sam Altman, made headlines with the launch of its AI tool ChatGPTin 2022. Backed by Microsoft, the company reached a valuation of $157 billionin October following a $6.6 billion investment round. In September, Reuters firstreported on OpenAI's plan to restructure its corporate model, separating itsfor-profit operations from nonprofit control. The restructuring is designed tocreate a public benefit corporation that will ease capital raising and ensurethe company remains one of the most well-resourced nonprofits in history.

Musk, who owns theAI startup xAI, is suing OpenAI to block the conversion, arguing that itdeviates from the company’s original mission, which he funded. A ruling onMusk’s request for a preliminary injunction is expected later this month.

Delaware AttorneyGeneral Kathy Jennings has also weighed in, submitting an amicus brief onDecember 29, stating that her office is reviewing OpenAI's proposed changes.

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