A consortium led by Elon Musk will withdraw its $97.4-billion bid for OpenAI's non-profit arm if the ChatGPT maker drops plans to become a for-profit entity, the billionaire's lawyers said in a court filing on Wednesday.

Musk has been trying to block the startup he co-founded and later left from becoming a for-profit firm, a move OpenAI argues is crucial for it to secure more capital and compete in the AI race.

"If (the) OpenAI board is prepared to preserve the charity's mission and stipulate to take the 'for-sale' sign off its assets by halting its conversion, Musk will withdraw the bid," the filing in US District Court, Northern District of California, said.

If not, "the charity must be compensated by what an arms-length buyer will pay for its assets."

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Musk's "serious offer" was to further the charity's mission, the filing added.

Musk owns a competing AI startup, xAI, launched in 2023.

OpenAI and Musk, CEO of Tesla and social media platform X, did not respond to requests for comment.

OpenAI's board has received the bid, after an initial snafu of not seeing it 24 hours after Musk's group said they sent the bid over, a source familiar with the matter told Reuters.