Musk Urges Auction for OpenAI Stake Amid Nonprofit Restructuring
Elon Musk’s attorney, Marc Toberoff, has urged the attorneys general of California and Delaware to advocate for OpenAI to auction a significant portion of its stake. This step, proposed as part of OpenAI's corporate restructuring, aims to establish a fair market value for its charitable assets, according to sources familiar with the matter.
In a letter sent earlier this week, Toberoff argued for a competitive bidding process to ensure the protection of public interest, as OpenAI transitions away from its nonprofit model. OpenAI has maintained that independent financial experts will determine the valuation of its charitable assets.
The company, co-founded by Musk and Sam Altman, gained global prominence with the 2022 release of its artificial intelligence tool. Supported by major investors, OpenAI was valued at $157 billion in October following significant fundraising. The startup recently announced plans to create a public benefit corporation, enabling it to raise greater capital while strengthening its nonprofit resources.
Musk, who owns AI firm xAI, has initiated legal action to prevent OpenAI’s transition, arguing that it contradicts the original mission he helped fund. A preliminary ruling on Musk's legal challenge is expected later this month.
The Delaware Attorney General, Kathy Jennings, has expressed ongoing scrutiny of OpenAI's restructuring, filing a brief in late December to underscore her office’s close monitoring of the situation. Meanwhile, the California Attorney General has yet to publicly comment on the matter.
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