OpenAI’s board has unanimously rejected Elon Musk’s bid to acquire the artificial intelligence company for $97.4 billion, with the board chairman asserting that the company is “not for sale.” Bret Taylor, OpenAI’s chairman, made the statement on Friday via a post on Musk’s X platform, formerly Twitter.
“OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition,” Taylor said. He further emphasized that any potential reorganization of OpenAI would only strengthen the company’s mission as a nonprofit dedicated to ensuring the benefits of artificial general intelligence (AGI) are shared with all of humanity.
Musk, who co-founded OpenAI in 2015 with the intention of fostering the development of safe and beneficial AI, recently filed court documents saying he would withdraw his $97.4 billion offer if OpenAI’s board agreed to return the company to its original non-profit “charity” model. Currently, OpenAI operates under a hybrid structure, with a nonprofit parent organization and a for-profit subsidiary.
The transition to a for-profit model, which OpenAI CEO Sam Altman believes is vital for the company’s continued growth, has been a point of contention with Musk, especially after he left the company in 2018. Musk, who initially provided $45 million in funding to OpenAI, departed due to concerns over potential conflicts of interest, particularly as Tesla’s focus on AI grew.
In 2023, Musk launched his own AI company, xAI, following OpenAI’s rise to prominence in the AI sector. The growing costs associated with developing and deploying AI technologies have prompted OpenAI to seek a more stable governance structure and equity investments to continue its innovation.
The board’s decision comes amid ongoing tension with Musk, who reportedly sees his offer as a way to challenge OpenAI’s ability to compete. OpenAI’s Chief Global Affairs Officer, Chris Lehane, pointed out that Musk’s offer could be seen as a move from a competitor struggling to keep up in the rapidly advancing AI marketplace.
The rejection of Musk’s offer puts the focus back on OpenAI’s ongoing restructuring efforts, which include the challenge of gaining approval from California and Delaware authorities as the company transitions to a more traditional for-profit structure. These changes, however, are not without scrutiny, as the value of OpenAI’s nonprofit arm will be examined carefully during the process.
Despite the rejection, Musk’s valuation of OpenAI at $97.4 billion significantly higher than current market estimates seems designed to stir up disruption in OpenAI’s fundraising efforts. However, for now, the board remains resolute in its commitment to its nonprofit mission, with no immediate plans to entertain acquisition offers.
