OpenAI’s Delaware Deal Faces Review

Delaware AG Orders Independent Review of OpenAI Restructuring

Delaware’s attorney general has taken a significant step in scrutinizing OpenAI’s for-profit conversion by hiring an investment bank to evaluate the deal, according to a Wall Street Journal report. This independent assessment could potentially delay OpenAI’s transition plans or introduce new complications to the process.

Why the Review Matters

The conversion to a for-profit structure is crucial for OpenAI as it seeks to:

• Attract new investors
• Pave the way for a future public offering

However, the company must first navigate regulatory approvals in Delaware. While both OpenAI and Microsoft have engaged their own financial advisors, state officials are now mandating an independent valuation of the equity OpenAI’s nonprofit will retain.

Elon Musk’s Role in Valuation

Regulators appear focused on a critical factor that could dramatically impact the conversion terms: valuation. Experts suggest that Elon Musk’s $97.4 billion takeover bid for OpenAI earlier this year – though rejected – may have substantially increased the perceived value of OpenAI’s nonprofit arm.

This development adds complexity to what was already a challenging corporate restructuring, as the state’s independent review could lead to adjustments in the final terms of OpenAI’s for-profit transition.