‘Transparent Dodge:’ Elon Musk’s Attorney Says OpenAI’s Restructuring Plan ‘Changes Nothing

 

"OpenAI’s decision to partly walk back its plan to restructure as a for-profit business “changes nothing,” according to Elon Musk’s attorney, indicating that the billionaire may continue his legal battle against the AI startup.

Bloomberg reports that in a statement released late Monday, Marc Toberoff, Elon Musk’s lead counsel in pending litigation against OpenAI, criticized the company’s revised restructuring plan, calling it a “transparent dodge” that fails to address the fundamental issues at hand. Earlier that day, OpenAI announced that it would proceed with restructuring its for-profit division as a public benefit corporation while maintaining the overall business under the control of its nonprofit entity—a significant departure from its original plans that effectively preserves the current organizational structure.

The decision to keep the nonprofit in control of the company came after OpenAI faced considerable pressure from various stakeholders, including former employees, academics, and rivals like Musk, who co-founded the startup a decade ago before departing and subsequently launching his own AI venture. Musk had previously petitioned a judge to prevent OpenAI from transitioning to a for-profit business, and while the judge denied Musk’s request, parts of his lawsuit have been allowed to move forward. Additionally, Musk made an unsuccessful $97.4 billion offer to acquire the assets of the nonprofit that controls OpenAI, which the company dismissed as an attempt by Musk to use the legal system to hinder a competitor.

Toberoff argued that despite the revised restructuring plan, which appears to be designed to avoid legal scrutiny, OpenAI is still acting against its founding mission of developing AI for the benefit of all people. “The founding mission remains betrayed,” he stated, emphasizing that “charitable assets have been and still will be transferred for the benefit of private persons, including Altman, his investors and Microsoft.”

The ongoing legal dispute between Musk and OpenAI underscores the growing tension and competition within the rapidly evolving AI industry. As major tech companies and startups alike race to develop and deploy advanced AI systems, questions surrounding the governance, ownership, and societal impact of these technologies have come to the forefront.

While OpenAI’s decision to maintain its nonprofit status may alleviate some concerns about the concentration of power and wealth in the hands of a few individuals, Musk’s legal team appears determined to continue challenging the company’s actions.”