Elon Musk's all-cash bid for startup undercuts legal attack, says OpenAI

By Malathi Nayak

 

Elon Musk’s all-cash bid to buy OpenAI debunks arguments he’s making in court that the artificial intelligence startup’s assets cannot be “transferred away” for “private gain,” lawyers for the maker of ChatGPT and chief executive officer Sam Altman said in a court filing.

 

The unsolicited Feb. 10 offer by Musk and a coalition of deep-pocketed investors to acquire OpenAI for $97.4 billion shows that his request for a court order immediately blocking OpenAI’s conversion to a for-profit business is “an improper bid to undermine a competitor,” according to the filing Wednesday in federal court in Oakland, California.

 

Musk’s lawyer Marc Toberoff didn’t immediately respond to a request for comment.

 

The filing, which includes the text of the offer, comes as both billionaires await a ruling by US District Judge Yvonne Gonzalez Rogers on Musk’s request to halt OpenAI’s restructuring plans while he pursues claims that the startup’s relationship with Microsoft Corp. violates antitrust law. 

 

Rogers signaled at a Feb. 4 hearing she wasn’t convinced she needs to take immediate action against OpenAI. She said she will probably let Musk take OpenAI to trial — and require him to testify — over at least some of his claims. Lawyers told the judge the earliest a trial could take place is in late 2026.

 

Altman has spurned the buyout offer, saying the company is “not for sale,” and called the overture by Musk, who owns rival startup xAI, an attempt to “slow us down.”

 

Musk’s move to take control of OpenAI contradicts his position in court that a transfer of the startup’s assets through restructuring would breach its mission as a charitable trust, according to Wednesday’s filing.

 

“Out of court, those constraints evidently do not apply, so long as Musk and his allies are the buyers,” the OpenAI lawyers said. “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.”

 

The case is Musk v. Altman, 4:24-cv-04722, US District Court, Northern District of California (Oakland).