OpenAI Board Rejects Elon Musk’s $97.4 Billion Offer

OpenAI’s board of directors has officially declined Elon Musk’s $97.4 billion takeover bid, dismissing the proposal from Musk and his group of investors

“OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition,” Board Chair Bret Taylor announced in a statement posted on X (formerly Twitter) on Friday. He further emphasized that any structural changes within the company would only reinforce OpenAI’s mission to develop artificial general intelligence (AGI) for the benefit of all humanity.

The decision is the latest development in the ongoing dispute between Musk and OpenAI over the company’s restructuring plans. Originally founded as a nonprofit research lab with a for-profit arm, OpenAI is working toward a new structure to facilitate fundraising and offer better returns for investors and employees.

Musk, who co-founded OpenAI in 2015 to advance safe AI development, recently indicated in court filings that he would withdraw his offer if the company reverted to its original nonprofit model. OpenAI operates under a hybrid structure, with a nonprofit parent overseeing a for-profit subsidiary.

The company’s shift to a for-profit model has been a long-standing point of contention between Musk and OpenAI, particularly after his departure in 2018. Musk, who initially contributed $45 million in funding, left due to concerns over potential conflicts of interest as Tesla expanded its AI capabilities.

Since then, OpenAI has risen to prominence in the AI industry, prompting Musk to launch his own AI venture, xAI, in 2023. The increasing costs of AI development have led OpenAI to seek additional funding and a more stable governance structure.

A Musk-led investor group proposed acquiring the company to turn it into an “open-source, safety-focused force.” If successful, the move would have caused a major shake-up in the AI industry and further strengthened Musk’s influence, particularly as the owner of OpenAI’s rival xAI.

In response to Musk’s offer, CEO Sam Altman sarcastically responded on X: “No thank you but we will buy Twitter for $9.74 billion if you want.”

Marc Toberoff, an attorney representing the Musk-led investors, said the rejection was unsurprising given Altman’s earlier remarks. However, he contested OpenAI’s claim that the company was not for sale. Toberoff also accused OpenAI’s leadership of self-dealing, “They’re just selling it to themselves at a fraction of what Musk has offered. Will someone please explain how that benefits ‘all of humanity?’”

This is not Musk’s first attempt to challenge OpenAI’s restructuring efforts. In June 2024, Musk filed a lawsuit against OpenAI but later dropped the case after the company released internal emails from its early days. The emails appeared to show Musk acknowledging the need for OpenAI to generate significant revenue to support its AI development—contradicting his claims that the company had strayed from its nonprofit roots.

Musk filed a second lawsuit in August 2024, accusing OpenAI of prioritizing profits over safety and engaging in racketeering.

OpenAI, in turn, has suggested that Musk’s actions stem from resentment over his departure. Musk left OpenAI in 2018 after failing to convince his co-founders to let Tesla acquire the company.

At the AI Summit in Paris, Sam Altman addressed Musk’s repeated challenges In an interview with Bloomberg TV, saying: “I wish he would just compete by building a better product.”

However, Chris Lehane, OpenAI’s Chief Global Affairs Officer, suggested that Musk’s proposal could be a strategic move from a competitor struggling to keep pace in the AI race.

Nevertheless, OpenAI’s leadership remains firm in its stance, with no plans to entertain acquisition offers.