The board of OpenAI, the creator of ChatGPT, has rejected a $97.4 billion unsolicited bid from a consortium led by billionaire Elon Musk, stating that the startup is not for sale and that any future offer would be disingenuous.
The bid marks Musk’s latest attempt to influence the direction of the company he co-founded with OpenAI CEO Sam Altman but later left in 2019.
“OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition. Any potential reorganization of OpenAI will strengthen our nonprofit and its mission to ensure AGI benefits all of humanity,” OpenAI Chairman Bret Taylor said in a statement on behalf of the board.
Musk’s lawyer reacts
Musk’s lawyer, Marc Toberoff, countered the statement, accusing OpenAI of prioritizing the enrichment of certain board members over its charitable mission.
“OpenAI is putting control of the for-profit enterprise up for sale, which will enrich its certain board members rather than the charity,” Toberoff said in a statement.
- The tension between Musk and OpenAI stems from the startup’s decision to create a for-profit arm in 2019, which has since attracted billions of dollars in funding, including significant investments from Microsoft.
- Musk has repeatedly criticized this move, alleging that OpenAI has strayed from its original mission of ensuring AGI benefits humanity by prioritizing profit over public good.
- In August 2023, Musk filed a lawsuit against Altman, OpenAI, and Microsoft, accusing them of breaching their contractual obligations. The lawsuit remains ongoing.
OpenAI’s restructuring plans
In late December 2023, OpenAI outlined plans to revamp its corporate structure, proposing the creation of a public benefit corporation to facilitate easier capital raising and remove restrictions imposed by its nonprofit parent organization.
This move has further fueled Musk’s opposition, as he seeks to prevent OpenAI from fully transitioning to a for-profit entity.
Musk’s consortium, which includes his AI startup xAI, Valor Equity Partners, Baron Capital, and Hollywood power broker Ari Emanuel, had offered to acquire OpenAI’s nonprofit arm on the condition that the company abandon its for-profit plans. However, OpenAI’s board dismissed the offer, calling it disingenuous.
What you should know
The rejection of Musk’s bid follows a series of public exchanges between the two parties. Earlier this week, Altman responded to the consortium’s offer with a simple “no thank you” on X, prompting Musk to label him a “swindler.”
However, OpenAI’s legal team, led by William Savitt, responded in a letter to Toberoff on Friday, accusing Musk’s consortium of adding new conditions to the proposal, rendering the bid invalid.
