Delaware’s attorney general is hiring an investment bank to advise on OpenAI’s for-profit conversion, the Wall Street Journal reported on Wednesday. The independent evaluation could prolong the transition, or gum up OpenAI’s plans even further.
OpenAI’s conversion will help it attract new investment and eventually go public, but first, the startup needs to secure approvals from state regulators. Although OpenAI and Microsoft have hired their own investment banks to advise on the deal, Delaware’s attorney general is now seeking an independent evaluation of the equity that OpenAI’s nonprofit will receive.
Regulators seem to be zeroing in on a key factor in OpenAI’s conversion, which could significantly affect the price OpenAI ultimately pays to simplify its structure. Corporate governance experts say Elon Musk may have raised the price of OpenAI’s nonprofit when he submitted a $97.4 billion takeover bid for the startup, despite the fact that OpenAI promptly rejected it.
