A lawyer representing Elon Musk has urged the attorneys general of California and Delaware to pressure OpenAI to auction off a major stake in its business.
The goal is to establish a fair market value for the company’s charitable assets amid its ongoing corporate restructuring, sources familiar with the matter told Reuters on Thursday.
Marc Toberoff, Musk’s attorney, sent a letter on Tuesday to the top law officials in both states. In the letter, Toberoff argued that the states should facilitate a competitive bidding process to determine the fair value of OpenAI’s charitable assets in order to “protect the public’s beneficial interest” as the company works to relinquish control of its non-profit arm.
An OpenAI spokesperson responded, accusing Musk of engaging in “lawfare,” while reiterating the company’s focus on its mission. OpenAI has previously stated that the valuation of its charitable assets will be handled by independent financial advisors. The Financial Times first reported on the letter.
OpenAI, co-founded by Musk and others, gained global recognition with the 2022 launch of its AI tool, ChatGPT. The company, backed by Microsoft, was valued at $157 billion in October after raising $6.6 billion from investors.
In September, Reuters first reported on OpenAI’s plans to restructure, separating its for-profit arm from the non-profit. The company provided further details in December, explaining that it intends to create a public benefit corporation to streamline capital raising, which it believes will position the non-profit to become “one of the best-resourced in history.”
Musk, who also owns the AI startup xAI, is suing OpenAI to block the transition, claiming that the move deviates from the mission he originally funded. A court decision on a preliminary injunction requested by Musk’s legal team is expected later this month.
Delaware Attorney General Kathy Jennings has already weighed in on the matter, filing an amicus brief with the court on Dec. 29, stating that her office is reviewing OpenAI’s proposed changes. Legal experts suggest that Delaware’s involvement could influence the court’s decision on whether to grant the injunction.
California Attorney General Rob Bonta, who also has jurisdiction, has yet to comment on the case, despite a letter from Meta urging him to intervene.
