NEW YORK, Feb. 11 (Xinhua) -- Elon Musk's offer for the assets of OpenAI could end up costing Sam Altman, whether he takes it or not, reported The Wall Street Journal (WSJ) on Tuesday, adding that for months, the OpenAI chief executive has been working with investors to determine how to fairly compensate the nonprofit that currently controls the company as part of a plan to spin it out and make the ChatGPT developer a for-profit venture.
"Musk's 97.4 billion U.S. dollars offer, with the backing of a consortium of investors, could force OpenAI's board of directors to reassess how it is valuing the nonprofit, which the board has said will be fairly compensated in the transaction and own a stake in the for-profit," noted the report.
The higher the valuation of the nonprofit, the bigger its stake would likely be in the for-profit OpenAI following a conversion, it said.
At the same time, OpenAI is negotiating how much equity Microsoft, its biggest investor, should get in the for-profit company, along with other backers and employees. It is also seeking to raise up to 40 billion dollars of new capital. Investors in that round will likely expect equity when OpenAI becomes a for-profit as well, according to the report.
"Satisfying all those parties was already complicated. If Musk's gambit increases the equity awarded to the nonprofit, it will be even more difficult," it added.
