Elon Musk’s legal team has urged attorney generals in California and Delaware to compel OpenAI to auction a major stake in its business to determine the fair market value of its charitable assets amid its corporate restructuring. This move, disclosed through sources, comes as Musk intensifies his legal efforts to challenge OpenAI’s transition to a public benefit corporation.
The Call for Competitive Bidding
Musk’s attorney, Marc Toberoff, argued in a letter to the states’ top legal officers that competitive bidding is necessary to protect the public’s interest in OpenAI’s charitable assets. The startup, co-founded by Musk and now led by Sam Altman, announced its restructuring plan in December to separate its for-profit operations from its non-profit control, enabling it to attract more investment.
OpenAI, valued at $157 billion in October 2024, previously stated that independent financial advisors would assess the value of its charitable assets. However, Musk’s team contends this process may not sufficiently safeguard public interests.
Legal and Political Developments
Musk, who owns AI startup xAI, has filed lawsuits to block OpenAI’s restructuring, claiming it strays from the mission he initially funded. The court is expected to rule on his request for a preliminary injunction later this month.
Delaware Attorney General Kathy Jennings submitted an amicus brief on December 29, signaling close scrutiny of OpenAI’s proposed changes. California Attorney General Rob Bonta has not yet commented, despite external pressure, including a letter from Meta urging intervention.
Industry and Academic Perspectives
Legal experts suggest Delaware’s active monitoring may influence judicial reluctance to halt OpenAI’s plans. Darryll Jones, a law professor at Florida A&M University, remarked that Delaware’s involvement could weaken Musk’s arguments about fiduciary breaches or potential risks.
OpenAI’s Position
OpenAI, backed by Microsoft and known for its groundbreaking AI tool ChatGPT, emphasized its commitment to its mission in the face of Musk’s actions. A spokesperson stated, “Elon is engaging in lawfare. We remain focused on our mission and work.”
As the legal battle unfolds, the case raises significant questions about the intersection of public benefit, private investment, and the evolving landscape of AI governance.
