TODAY’S NEWS
Elon Musk’s legal team has called on the attorneys general of California and Delaware to advocate for a competitive auction to establish the fair market value of OpenAI’s charitable assets during its restructuring process. According to sources, Marc Toberoff, Musk’s lawyer, submitted a letter on Tuesday requesting that the states ensure an open bidding process to safeguard public interest as OpenAI transitions away from nonprofit control.
“Elon is engaging in lawfare. We remain focused on our mission and work,” stated a spokesperson for OpenAI. The organization has previously indicated that independent financial advisors would determine the valuation of its charitable assets. Earlier in the day, the Financial Times first reported on Toberoff’s letter.
OpenAI, co-founded by Musk and Sam Altman among others, became a prominent figure in the tech world following the 2022 launch of its AI tool, ChatGPT. Supported by Microsoft, OpenAI achieved a valuation of $157 billion in October after raising $6.6 billion in investments.
In September, Reuters revealed OpenAI’s plan to separate its for-profit operations from nonprofit oversight. By December, the company outlined its intention to establish a public benefit corporation, aiming to raise significant capital while maintaining robust nonprofit resources.
Musk, who now owns the AI startup xAI, has filed lawsuits to halt OpenAI’s restructuring, arguing it deviates from the mission he originally funded. A court decision on Musk’s request for a preliminary injunction is anticipated later this month.
Delaware Attorney General Kathy Jennings has entered the fray, filing an amicus brief on December 29 to signal her office’s review of OpenAI’s restructuring proposal. Legal expert Darryll Jones commented, “Delaware’s involvement in monitoring the situation may weaken the argument for an injunction based on fiduciary concerns.”
California Attorney General Rob Bonta, despite receiving a letter from Meta urging intervention, has yet to comment on the case. Meanwhile, Encode, a nonprofit focused on AI safety, has joined Musk’s efforts to oppose OpenAI’s transition.
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