SAN FRANCISCO — OpenAI’s board of directors has decisively rejected a takeover bid valued at $97.4 billion from Elon Musk.
In a statement released on Friday, the board emphasized, “OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition,” as stated by Bret Taylor, chair of OpenAI’s board.
William Savitt, an attorney for OpenAI, communicated to Musk’s legal representative that the proposal “is not in the best interests of OAI’s mission and is rejected.”
Musk, who was an early investor in OpenAI, has engaged in legal action against the organization for nearly a year. He alleges breach of contract, claiming that the organization has strayed from its founding objectives as a nonprofit entity he helped establish a decade ago.
Recently, while awaiting a crucial ruling in his ongoing case, Musk, in collaboration with his AI startup xAI and a consortium of investors, submitted a bid to acquire the nonprofit that oversees OpenAI. Subsequently, Musk expanded on this proposal in a court filing aiming to gain a controlling stake in OpenAI’s for-profit subsidiary.
Savitt’s letter noted that Musk’s recent submission introduced “new material conditions to the proposal,” asserting that it is now evident that the much-anticipated “bid” is not a genuine offer. However, he reaffirmed that the board has unanimously rejected the proposal “even as first presented.”
Musk has argued in his lawsuit that the companies involved are contravening the terms of his foundational contributions to the nonprofit. Reports indicate he invested approximately $45 million in the startup from its inception until 2018.
He intensified the legal conflict late last year by incorporating additional claims and defendants, including OpenAI’s partner Microsoft, and is seeking a court order to prevent OpenAI from fully transitioning into a for-profit entity. Musk has also included xAI as a plaintiff, contending that OpenAI is unfairly constraining competition within the industry. A judge is currently reviewing Musk’s request but has shown skepticism toward some of his allegations in a recent court hearing.
