Elon Musk’s X.AI-led investor consortium has offered to buy Openai for $97.4 billion this week. Openai CEO Sam Altman has rejected the proposal. This will boost the transformation Openai has planned from a nonprofit organization.
Altman’s lawyer said on Wednesday that Musk attempted to buy Openai’s assets and stopped changing its non-commercial status, and that Musk would have it in both ways. He insisted that he could not. Musk’s team responded that if Openai halted its attempt to convert from a nonprofit, it would withdraw its bid.
Meanwhile, as part of these submissions, a full letter of intent from the mask team to purchase the open has been published.
Here are five important details we have learned from this letter and other legal submissions.
Clear the deadline set
Unsolicited offers from Musk’s Group have a specific expiration date. May 10, 2025. There are exceptions to deadlines if the transaction is pre-confirmed.
Despite Altman’s public layoffs including a joke counter offer to buy X for a tenth, Openai’s board of directors is to legally evaluate such offers, even from competitors. We are not formally denying the offer as it is usually necessary for.
All-cache transactions
Musk’s Consortium, which includes VCs such as Joe Lonsdale’s 8VC and SpaceX Investor Vy Capital, offers just $9737.5 billion to buy Openai, saying 100% of the purchase price will be “paid in cash.” .
This is noteworthy as Mask has not avoided using debt in the past. I borrowed $13 billion from the bank to buy Twitter (now X) in 2022. Since then, his net worth has increased significantly, up by around $400 billion. , since the election of his new ally Donald Trump.
However, the letter names seven investors, including mask AI company X.ai, and seven investors, including “others” without a name.
Full access to books and personnel
Before diverting all that cash, buyers want to look into Openai’s financial and business records along with access to Openai staff for interviews. It means everything from assets, facilities, equipment, books, records, according to the letter.
This is a normal part of due diligence, and could also give Musk’s X.AI (Openai’s competitor) access to sensitive inside information, especially for a big offer of $97.4 billion. And once they saw it all, their diligence could provide them with a reason to withdraw their offer.
The offer could undermine Musk’s lawsuit
The $97.4 billion bid to acquire Openai contradicts Musk’s legal claim that startup assets cannot be “relocated” to “private again,” Openai’s lawyers in the lawsuit Wednesday He argued in court filings.
Openai suggested that the offer was not serious, but “an inappropriate bid to undermine competitors.” But the Musk consortium says their offers are certainly “serious” and that cash will be sent to open nonprofits to promote its mission.
Musk may withdraw if Openai stays in a nonprofit organization
Musk’s legal team said that if the board promises to maintain it as a nonprofit, he promises to maintain it as a nonprofit, he will make it as a nonprofit, according to a court filing on Wednesday. They say they’ll withdraw it.
Filing claims that mask acquisition offers are genuine, and says nonprofits should receive the fair market value of their assets based on what independent buyers pay.
This appears to validate what some experts are making claims. The offer was intended to raise the price Altman had to pay to make the company private.
In a statement, an attorney representing Openai’s board said Musk’s bid would “set no value.” [OpenAI’s] Nonprofit organizations and nonprofit organizations are “not for sale.”
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