Elon Musk has requested the attorneys-general of California and Delaware to mandate an auction of a substantial portion of OpenAI’s stake.
What Happened: Musk’s legal representative, Marc Toberoff, reached out to the top legal officers of the states on behalf of major AI investors, advocating for an open bidding process, reported Financial Times on Thursday.
However, OpenAI has no intention of conducting such an auction, the report noted, citing according to a source familiar with the company’s position.
Musk’s legal team contends that an auction is essential to ensure the non-profit receives maximum value for its assets. Sources suggest that the non-profit’s stake in the proposed public benefit corporation could be worth billions.
The attorneys general have not yet responded to Musk’s request.
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Why It Matters: The dispute originates from OpenAI’s shift from a non-profit to a for-profit entity, a transition Musk has opposed. The Sam Altman-led company plans to become a public benefit corporation, requiring the non-profit to relinquish control over its operations.
Earlier, the “Godfather of AI,” Geoffrey Hinton, expressed support for Musk’s stance. Meta Platforms Inc. (NASDAQ:META) has also backed Musk, arguing that OpenAI should not convert assets developed under its non-profit status for private gain.
OpenAI’s valuation soared to $157 billion last year. The AI startup has received about $14 billion in investment from Microsoft Corporation (NASDAQ:MSTF).
Image via Wikimedia Commons
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