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Elon Musk recently attempted an unsolicited takeover of Openai which was rejected by CEO Sam Altman and the Board of Directors of Non -profit Openai.
From now on, the Chatgpt creator wanted to make sure that any future richest man’s state in the world – or any other investor – will not succeed.
According to a Financial Times reportThe changes discussed would give directors of the existing non -profit administrators of OpenAi, allowing them to preserve the power of Openai even if the organization of artificial intelligence is restructured in a profit company known by the name of company public services.
By concentrating such power in the non -profit arm of Openai, the reached AI could refute the musk’s argument that he moved away from his original charitable mission. It could also allow members of the board of directors to underly other donors of the for-lucrative company, such as Microsoft (Msft) or SoftBank.
Sam Altman, co-founder and CEO of Openai. Reuters / Axel Schmidt / Photo file ·Reuters / Reuters
All this will take maneuvers by the members of the board of directors of Openai and Altman, who are all accused in a Musk trial which seeks to prevent OPENAI from converting to a for -profit business.
“There are strategic decisions that can be made to protect a non -profit organization from a takeover or a hostile coup,” wrote the expert in non -profit law Ellis Carter Business lawyer Blog. But making the association for non -profit “really insensible”, explained Carter, must be done with care.
Since non -profit companies have no stock and no official property, it added: “The conception of governance is critical”.
For the moment, the Board of Directors of Openai is empowered to repel acquisitions because, as a non -profit organization, it has no shareholders or voting members. But the University of California, professor of law of Los Angeles Rose Chan Loui said Openai seems to be concentrated on the fortification against a hostile takeover which could come after the conversion of its for -profit subsidiary into a public service company.
Chan Loui suspects that Optai would give its members of the Council a special class of voting in the company restructured for profit with rights superior to other owners of action. At the very least, she said, their votes could cancel any buy-back decision by private investors, including the largest OPENAI investor, Microsoft.
Beyond that, she said, we do not know how specific the voting rights could be. For example, they could limit themselves to refusing attempts to take control or as large as the global rights currently held by the non -profit board of directors.
“We need more details,” said Chan Loui.
Openai did not respond to a clarification request.
Microsoft CEO, Satya Nadella, CEO on the right and Openai, Sam Altman, on the left, in 2023 at the Openai Devday Conference. (Justin Sullivan / Getty Images) ·Justin Sullivan via Getty Images
Currently, investors and Microsoft are not holders of actions in Openai, but rather have for profit in terms of for -laws of Openai. Once Openai is profitable, Microsoft is entitled to 75% of profits until it recovers its main investment of $ 13 billion. The remaining 25% of profits go to employees and first investors, up to specified profit ceilings.
Once Microsoft’s principal is reimbursed, it is entitled to 50% of profits until it reaches a profit ceiling of $ 92 billion.
OPENAI said He wishes to convert his non -profit parent into a public service company in Delaware (PBC) which would issue ordinary actions.
In theory, the PBC could provide interest on actions to new investors and potentially convert interest to the profit of existing investors to equity interests.
Chan Loui said special voting rights could be designed to act as a poisoned pill This would allow the board of directors and existing shareholders – apart from any activist investor – to buy additional shares at a significant discount.
Openai is not completely inoculated by external offers, despite the power of the board of directors. Legally, the board of directors is responsible for carrying out its mission to “ensure that general artificial intelligence … benefits all humanity”. And on his website, he says that it could mean putting his resources behind a similar oriented project.
“If a project aligned with value and concerned about security is close to the construction of AGE before doing so, we are committed to stopping competing and starting to help this project”, the charter of the charity states.
Elon Musk after a meeting with Indian Prime Minister Narendra Modi in Washington, DC, on February 13. Reuters / Nathan Howard / Photo File ·Reuters / Reuters
Under the law of Delaware, where Openai is registered, the non -profit board of directors has the obligation to seriously review the acquisition offers and to explain the reasons for rejecting them.
Charitable organizations are generally not targets for hostile controls, especially not the type that Musk had in mind – an unsolved offer of $ 97.4 billion for the $ 157 billion of Openai in intellectual property and other assets.
Instead, non -profit organizations are more often faced with internal power struggles, such as the offensive In the environmental group, the Sierra Club began in 2003 with anti-immigration defenders.
But non -profit organizations can, in fact, protect from the control of members by allocating special voting rights to the members of the board of directors as long as rights adhere to the laws of the state where the charity is organized, non -profit lawyer Frank Devito wrote In a blog article.
Musk and Altman initially co -founded Openai in 2015 as a non -profit organization, but Musk separated from the IA company for disagreements concerning how to go ahead with the company and A Finally launched a competitive AI company called XAI.
Musk’s trial seeking to prevent the conversion of Openai into a for -profit business focuses on the initial donation of $ 45 million musk to finance the startup, which, according to him, was subordinate to the Openai by staying a non -profit organization.
Openai said he had to convert to a for -profit structure to attract new capital.
At 97 billion dollars, the Musk’s takeover supply fell considerably below the current assets of Openai assets. The Japanese Conglomerate Softbank provides for a new investment of $ 40 billion, which would place the value of Openai at everywhere from $260 billion at $300 billionAccording to various media reports.
Altman made his public rejection in an article on X, the social media platform formerly known as Twitter that Musk bought for $ 44 billion in 2022.
Altman wrote: “No thanks but we will buy Twitter for $ 9.74 billion if you wish.”
Elon Musk and Sam Altman in 2015. (Photo by Michael Kovac / Getty Images for Vanity Fair) ·Michael Kovac via getty images
OPENAI has also declared in a separate legal document that Musk’s offer for Openai contradicted his complaint in his current trial that OpenAi assets should not be used for a profitable gain.
“The alleged Musk redemption offer cannot be reconciled with the demand for a charitable trust [he] Advance in this court, “he said.
The Board of Directors of Openai officially rejected Musk’s offer on February 14. “Openai is not for sale, and the board of directors unanimously rejected Mr. Musk’s last attempt to disturb his competitors,” said Bret Taylor, president of Openai, in a statement in the name of Board of directors.
