Elon Musk Calls for Auction of OpenAI Stakes Amid Ongoing Feud

Elon Musk has reportedly called on the attorneys general of California and Delaware to mandate an auction of significant stakes in OpenAI, the company behind ChatGPT, in a bid to ensure a fair and transparent market valuation.

This latest move intensifies Musk’s ongoing feud with OpenAI, which he co-founded in 2015 alongside current CEO Sam Altman.

Musk’s legal team argued that such an auction, driven by major AI investors, would provide clarity on OpenAI’s worth and protect the public interest by ensuring an open and competitive process. Musk, who stepped down from OpenAI’s board in 2018 following disagreements with Altman, has been a vocal critic of the company, particularly regarding its restructuring in 2019 that saw the creation of a for-profit entity to support its non-profit mission.

The current structure allows OpenAI’s for-profit arm to raise significant funds—$13 billion to date—while ownership remains tied to its non-profit organization, alongside employees and external investors. However, OpenAI is reportedly considering a corporate restructure that would separate the for-profit and non-profit units, allowing the company to raise even more funds. Musk opposes this shift, advocating for an auction to determine the true market value of OpenAI’s assets to ensure transparency and safeguard public interests.

In response, an OpenAI representative rejected Musk’s proposal, accusing him and his supporters of attempting to create “more chaos.” OpenAI has no plans to hold an auction, according to the spokesperson.

This legal clash comes at a difficult time for Altman, who is also facing a lawsuit from his sister accusing him of abuse—allegations he has vehemently denied. The ongoing tension between Musk and OpenAI highlights the complex issues surrounding governance, transparency, and accountability in the rapidly growing AI industry.

As the battle continues, the outcome could have significant implications for how AI companies manage their financial operations and navigate their relationships with investors, stakeholders, and the public in the future. The stakes in the world of generative AI are high, with the potential to shape global technology, economics, and policy.