OpenAI Rejects Elon Musk-Led $97.4 Billion Takeover Bid Amid Legal Battle
It seems the cold war between the co-founder of Elon Musk and Open AI is getting only more intense amid rejection of its co-founder led by a whopping takeover bid in the sum of $97.4 billion. Unsolicited, and by a small group of private investors, they intended to drive it back as it was its previous nonprofit mode with a necessity from Musk concerning ethics in creating the AI itself.
Offer and OpenAI Response
Led by his AI start-up xAI and several private investment firms, Musk presented an enormous offer intended to target the hostile acquisition of OpenAI. But OpenAI retaliated with a tongue-in-cheek rejection from OpenAI CEO, Sam Altman, while on the very social media stage of Tesla's CEO, X, referring to "no thanks but we would buy Twitter at $9.74 billion should you want"
The Origins of the Conflict
Early investor and board member of OpenAI, Musk resigned from the board in 2018. Since then, he has publicly expressed his disappointment over the shift in the model towards profit orientation. Last year, he even filed lawsuits against OpenAI stating that it has strayed away from its initial mission of making sure AI works for the betterment of humans.
The tension came to a head when the nonprofit board of OpenAI dismissed Altman at the end of 2023, but then reinstated him days later with a new leadership team. The company has announced structural changes since then, but the shift from a nonprofit to a for-profit entity creates legal issues. Under U.S. tax laws, charitable assets have to remain in the nonprofit sector or be transferred at fair market value.
Legal Battle and Market Impact
Musk has asked the court to restrain OpenAI from shifting to a for-profit model. However, the U.S. District Judge Yvonne Gonzalez Rogers has not ruled on this issue yet. Though she said that there might be some validity to Musk's claims, she also stated that the case should be decided by a trial scheduled for next year.
Also on the cards, scrutiny of Microsoft's partnership with OpenAI makes one wonder at the influence corporates have on AI development. The court case may well write the future about AI governance and investment strategies.
What's Ahead?
OpenAI has rejected Elon Musk's proposal outright, making the legal war even more brutal. The precedent set by the case may help AI startups draw a line about ethical responsibility to commercial ambitions.
Stay tuned to Skill Bloomer for more updates on this happening story in the world of AI and technology.
