Musk, who founded xAI, his own AI startup, in 2023 has recently intensified efforts to halt OpenAI’s conversion.
In November, he filed a California preliminary injunction request to stop the process. Meta has also supported the lawsuit.
Musk’s legal team wrote in November that “OpenAI and Microsoft exploiting Musk’s contributions so they can build a monopoly for profit, one now targeting xAI specifically, is just too many.”
Kathleen Jennings is the attorney-general of Delaware, where OpenAI was incorporated. She has since stated that her office was responsible for ensuring the conversion of OpenAI was in the public’s interest and determining if the transaction was at an appropriate price.
Members of Musk’s team, who are wary of Delaware authorities following a state judge’s rejection of a proposed $56-billion pay package for Tesla boss last month, read that as a rebuke to his efforts to stop the conversion and worry that it will be rushed. They also argue that OpenAI’s PBC should be converted in California, the state where its headquarters is located.
In a legal document filed last week, Musk’s lawyers said that Delaware’s handling “doesn’t inspire confidence.”
OpenAI agreed to become a public-benefit corporation within two years, as part of an October funding round of $6.6 billion. This gave it a value of $157 billion. Investors could get their money back if it fails to comply.
OpenAI still has a number issues to resolve, such as negotiating the value Microsoft’s investment into the PBC. According to a person familiar with the company’s thinking, a conversion was not imminent and could take months.
OpenAI’s spokesperson said: “Elon is engaged in lawfare.” We are focused on our work and mission. The California and Delaware Attorneys-General did not respond immediately to a comment request.
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