Musk Will Rescind Bid for OpenAI If It Remains a Nonprofit

Tesla and SpaceX CEO Elon Musk in Washington on Jan. 20, 2025. Chip Somodevilla/Pool/Reuters

Billionaire Elon Musk will rescind his bid for OpenAI, the maker of artificial intelligence chatbot ChatGPT, if the entity remains a nonprofit, according to a new court filing.

Musk and other investors recently offered $97.4 billion for OpenAI. The group said it wanted to keep the entity a nonprofit, operating for the public good.

“If OpenAI, Inc.’s Board is prepared to preserve the charity’s mission and stipulate to take the ‘for sale’ sign off its assets by halting its conversion, Musk will withdraw the bid,” Musk’s lawyers wrote in the Feb. 12 filing.

“Otherwise, the charity must be compensated by what an arms-length buyer will pay for its assets.”

Musk has also filed a lawsuit in federal court in California requesting an order preventing OpenAI from transitioning to for-profit status.

Attorneys for OpenAI on Wednesday said in a filing that Musk’s bid “cannot be reconciled with the charitable trust claim he is advancing in this Court, or the injunction he is seeking on the back of that claim.”

“In this Court, Musk argues that OpenAI, Inc.’s assets cannot be ’transferred away‘ for ’private gain.‘ Accordingly, he seeks an injunction barring any ’conversion‘ of OpenAI, Inc. into a ’for profit enterprise,‘ or any effort to ’achieve the same end‘ by ’transferring any material assets, including intellectual property owned, held, or controlled by OpenAI, Inc,’” they wrote.

“But out of court, those constraints evidently do not apply, so long as Musk and his allies are the buyers. Musk would have OpenAI, Inc. transfer all of its assets to him, for his economic benefit and that of his competing AI business and hand-picked private investors.”

Musk’s lawyers said in response that the bid and the attempt to block the transition should be treated separately.

“Whether Musk or any other party might purchase OpenAI, Inc.’s assets following regulatory approval of the ‘conversion’ OpenAI itself initiated is immaterial to whether it is currently violating its charitable obligations,” they stated. “The purchase offer would become relevant only after—and if—(1) this Court denies Plaintiffs’ Motion, (2) OpenAI proceeds with its conversion, and (3) OpenAI obtains approvals from the IRS and California and Delaware Attorneys General.”

They then stated Musk’s commitment to withdraw the bid if OpenAI remained a nonprofit.

In 2015, co-founders Sam Altman and Musk jointly established the entity as a charitable organization. Musk later left over differences with Altman about the direction the company was taking.

Altman then became CEO and launched a for-profit unit within OpenAI to secure funding from investors such as Microsoft.

Altman is now working on a plan to restructure the core business into a for-profit entity that will no longer be controlled by its nonprofit board. The nonprofit will, however, continue to exist and own a minority stake in the for-profit company. Musk has sued to prevent this transition.

The nonprofit is not for sale, Altman said this week.

Reuters contributed to this report.