xA massive bag of money — promised though far from assured — made an appearance this week in the high-stakes litigation Elon Musk has pending in federal court in Oakland regarding artificial intelligence.
Since September of 2024, U.S. District Judge Yvonne Gonzalez Rogers has presided over the latest iteration of Musk’s lawsuit against Sam Altman, Microsoft, OpenAI Inc. and its affiliates over control of the technology behind ChatGPT.
The parties were last in her court on Feb. 4 to argue about Musk’s request for a preliminary injunction to stop any efforts by the defendants to “convert” OpenAI from a nonprofit corporation to a for-profit entity, at least while Musk’s lawsuit is pending.
At the close of the hearing, the judge took that question “under advisement” and went off to write her opinion. But on Wednesday, a week after the hearing concluded, Altman and the other defendants asked the judge if she would allow them to “supplement” the record already in front of her. They wanted her to consider a proposed offer for OpenAI’s assets that Musk’s lawyer had sent them on Monday.
That already widely reported offer proposed that Musk and a group of investors would purchase the assets of OpenAI Inc. for $97.375 billion dollars, a transaction that if effectuated would create a charity dwarfing the assets of almost every other nonprofit in the country.
The defendants said the judge should consider the proposal because, in their view, it exposed the fact that Musk had brought the lawsuit not to preserve OpenAI’s humanity-focused mission as he claimed, but for his own financial and competitive gain. They summed up by saying that that Musk’s request for an injunction was nothing but “an improper bid to undermine a competitor.”
Before the end of the day, Musk’s lawyers fired back a heated opposition, claiming the proposed offer was “entirely irrelevant” to the motion pending in front of her. Moreover, Musk contended, the offer would only be meaningful down the road if the court denied his request for an injunction and OpenAI proceeded with its conversion to a for-profit corporation with approval from the IRS as well as the attorneys general of California and Delaware.
Musk used the opportunity to tell the judge that despite the extraordinary amount of money his group was offering to advance a charitable mission, Altman allegedly “rejected the offer unilaterally, on behalf of [OpenAI’s] Board, before the Board had even seen the proposal.”
That was completely consistent, Musk argued, with Altman’s track record of “self-dealing,” “putting profits over safety” and “concentrating AI’s power in the hands of Microsoft.”
The counter-intuitive positions of the parties — Musk trying to keep his own offer out of the case and Altman trying to include it — are not unusual in a matter in which jockeying and public theater have accompanied each step of the case.
When Musk filed the initial version of the lawsuit in San Francisco Superior Court in 2024, the complaint attempted to paint his suit as a heroic attempt to carry out a noble mission for the benefit of all humankind.
He claimed that OpenAI Inc., the nonprofit corporation co-founded by Musk and Altman, had gone far astray from its mission of developing artificial intelligence not for base financial gain but for the good of humanity.
Related Stories
Musk said Altman had corrupted OpenAI’s lofty goals for personal benefit by allowing tech giant Microsoft to access OpenAI’s technology through a series of multi-billion-dollar investments.
Musk subsequently withdrew that case and then refiled it in federal court, where the scope of his claims multiplied to include claims for antitrust violations, racketeering and breach of fiduciary duty.
OpenAI’s approach to the litigation from the beginning was to paint Musk as a competitor in the AI space who became disgruntled when Altman resisted his attempt to control the technology that OpenAI developed.
Bringing Musk’s proposal to the court is consistent with Altman’s approach of keeping the focus away from his own control of OpenAI, and painting Musk as an unreliable charlatan only out for himself.
How much weight Gonzalez Rogers would give to Musk’s proposal if she were to consider it is unclear.
When she heard the arguments on Feb. 4, the judge was engaged and well-prepared, at times seeming to know the materials before her better than the lawyers who submitted them. Given that, it seems unlikely that it will escape her attention that Musk’s “offer” — expressed in a three-page letter with a one-page attachment — isn’t a definitive purchase offer, just a “letter of intent” that expresses an interest in negotiating a deal.
In every respect, Musk’s proposal is subject to the parties reaching a “Definitive Agreement,” after Musk’s team is given authority to investigate OpenAI’s “assets, facilities, equipment, books and records.”
Commentators in the financial, business, and technology sectors have speculated on Musk’s strategy in presenting OpenAI with the offer, some considering it a cunning and low-cost way to illustrate the stakes for the public OpenAI’s conversion to a for-profit enterprise, others see it as just the sort of bluster and “bull in a china shop” approach that has frequently characterized Musk’s performative approach to business negotiation.
One thing seems clear.
At the Feb. 4 hearing, the judge seemed skeptical about Musk’s request for a preliminary injunction. She repeatedly expressed her concern about the difficulty of trying to draw the sharp lines a preliminary injunction would require in the rapidly changing waters around the development of artificial intelligence technology.
The latest dustup — and the fluidity of the situation — are unlikely to calm her fears.
The judge has not announced a timeframe for her decision on the preliminary injunction but a decision is expected shortly.