Summarize this content to 2000 words in 6 paragraphs in Arabic Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.A lawyer for Elon Musk has called on the California and Delaware attorneys-general to force OpenAI to auction off a large stake in its business, intensifying a bitter fight with the company\u2019s chief executive Sam Altman.In a letter to the states\u2019 top law officers seen by the Financial Times, Musk\u2019s attorney Marc Toberoff said he was writing on behalf of big artificial intelligence investors who wanted to participate in an open and competitive bidding process for the OpenAI stake. OpenAI had no plans for such an auction, according to a person with knowledge of the ChatGPT-maker\u2019s thinking. Musk\u2019s camp simply \u201cwant more chaos\u201d, they added.The highly unusual effort follows lawsuits launched by Musk in the past year over the attempt by OpenAI, which was founded as a non-profit dedicated to ensuring AI benefits humanity, to restructure as a for-profit company.Musk co-founded OpenAI with Altman and nine others in 2015, and was the most significant early funder before leaving the board in 2018 after clashing with Altman.OpenAI launched a for-profit subsidiary a year later in order to raise outside capital, including more than $13bn so far from its biggest backer, Microsoft. However, the non-profit entity, along with employees and investors, currently owns that for-profit subsidiary. OpenAI is attempting to become a public benefit corporation, a type of for-profit entity committed to bettering society. The company has suggested that the non-profit\u2019s \u201csignificant interest\u201d in the existing for-profit would take the form of shares in the PBC at a fair valuation, which it says will be determined by independent financial advisers.The PBC would run and control OpenAI\u2019s operations and business, while the non-profit would \u201cpursue charitable initiatives in sectors such as healthcare, education and science\u201d, the company wrote in a December blog post. In his letter, Musk\u2019s lawyer pushed the attorneys-general to allow outside investors to bid for the non-profit\u2019s stake in OpenAI. If successful, that could allow an outside investor to take a significant position in, and to exercise control over, the start-up.The proposed conversion to a PBC would also mean the non-profit entity will relinquish governance over OpenAI\u2019s business and operations. One person familiar with the situation said those powers could themselves be worth billions of dollars. In the letter, Toberoff suggested an auction was the only way to ensure the non-profit receives maximum value for its assets and upholds its fiduciary duties. The non-profit\u2019s stake in the public benefit corporation was likely to be worth tens of billions of dollars, according to a person with knowledge of the matter. The Tesla chief and confidant of US president-elect Donald Trump has previously accused Altman of \u201cdeceit of Shakespearean proportions\u201d, alleging that OpenAI and Microsoft have departed from the start-up\u2019s original mission. OpenAI said in December that its conversion into a PBC would \u201cresult in one of the best resourced non-profits in history\u201d and multiply the donations given by early backers \u2014 including Musk \u2014 \u201cmanyfold\u201d. Its complex corporate governance came under scrutiny when Altman was briefly ousted by the non-profit board in November 2023, and the company has since been weighing more conventional arrangements. Musk, who founded his own AI start-up xAI in 2023, has recently stepped up efforts to derail OpenAI\u2019s conversion.In November, he sought to block the process with a request for a preliminary injunction filed in California. Meta has also thrown its weight behind the suit, which is the fourth Musk has launched against OpenAI. In legal filings from November, Musk\u2019s team wrote: \u201cOpenAI and Microsoft together exploiting Musk\u2019s donations so they can build a for-profit monopoly, one now specifically targeting xAI, is just too much.\u201dKathleen Jennings, attorney-general in Delaware \u2014 where OpenAI is incorporated \u2014 has since said her office was responsible for ensuring that OpenAI\u2019s conversion was in the public interest, and determining whether the transaction was at a fair price.Members of Musk\u2019s camp \u2014 wary of Delaware authorities after a state judge rejected a proposed $56bn pay package for the Tesla boss last month \u2014 read that as a rebuke of his efforts to block the conversion, and worry it will be rushed through. They have also argued OpenAI\u2019s PBC conversion should happen in California, where the company has its headquarters.In a legal filing last week Musk\u2019s attorneys said Delaware\u2019s handling of the matter \u201cdoes not inspire confidence\u201d. OpenAI committed to become a public benefit corporation within two years as part of a $6.6bn funding round in October, which gave it a valuation of $157bn. If it fails to do so, investors would be able to claw back their money. There are a number of issues OpenAI is yet to resolve, including negotiating the value of Microsoft\u2019s investment in the PBC. A conversion was not imminent and would be likely to take months, according to the person with knowledge of the company\u2019s thinking.OpenAI declined to comment. The California and Delaware attorneys-general did not immediately respond to a request for comment.<\/p>\n","protected":false},"excerpt":{"rendered":"
Summarize this content to 2000 words in 6 paragraphs in Arabic Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.A lawyer for Elon Musk has called on the California and Delaware attorneys-general to force OpenAI to auction off a large stake in its business, intensifying<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[63],"tags":[],"class_list":{"0":"post-159732","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-tech"},"_links":{"self":[{"href":"https:\/\/globetimeline.com\/ar\/wp-json\/wp\/v2\/posts\/159732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/globetimeline.com\/ar\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/globetimeline.com\/ar\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/globetimeline.com\/ar\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/globetimeline.com\/ar\/wp-json\/wp\/v2\/comments?post=159732"}],"version-history":[{"count":0,"href":"https:\/\/globetimeline.com\/ar\/wp-json\/wp\/v2\/posts\/159732\/revisions"}],"wp:attachment":[{"href":"https:\/\/globetimeline.com\/ar\/wp-json\/wp\/v2\/media?parent=159732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/globetimeline.com\/ar\/wp-json\/wp\/v2\/categories?post=159732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/globetimeline.com\/ar\/wp-json\/wp\/v2\/tags?post=159732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}