Elon Musk’s attorney, Marc Toberoff, has urged California and Delaware attorney generals 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.
In a letter sent Tuesday, Toberoff argued for a competitive bidding process to protect public interests as OpenAI transitions its non-profit control to a for-profit model, sources told Reuters. OpenAI, co-founded by Musk and Sam Altman, recently announced plans to establish a public benefit corporation, claiming it would enable greater capital raising while maintaining one of the best-resourced non-profits.
OpenAI was valued at $157 billion in October after raising $6.6 billion, backed by Microsoft. Musk, who owns AI startup xAI, is suing OpenAI to block its restructuring, asserting it deviates from its original mission. The court will decide on Musk’s preliminary injunction later this month.
Delaware Attorney General Kathy Jennings filed an amicus brief on Dec. 29, indicating she is reviewing OpenAI’s proposal. California Attorney General Rob Bonta has not commented despite Meta’s letter urging intervention.
OpenAI spokesperson dismissed Musk’s actions as “lawfare” and affirmed its focus on its mission. The startup previously stated independent financial advisors would assess its charitable assets. AI safety non-profit Encode has joined Musk’s efforts to oppose the restructuring, citing fiduciary concerns.
Legal experts suggest Delaware’s oversight may undermine Musk’s case against the transition.
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