OpenAI Board Rejects Elon Musk's $97.4B Takeover Bid

“OpenAI is not for sale, and the board has firmly rejected Mr. Musk's attempt to disrupt competition,” stated Bret Taylor, chairman of OpenAI's board, in a press release on Friday.

The rejection was further underscored in a letter from OpenAI’s attorney, William Savitt, to Musk’s legal team, asserting that the proposal “does not align with OpenAI’s mission and is hereby rejected.”

Musk, an early investor and one of the founding figures of OpenAI, has been in a protracted legal battle with the AI company for almost a year. He accuses OpenAI of breaching its original nonprofit mission by increasingly monetizing generative AI technology. Musk claims that the company has strayed from its founding principles of developing AI for the benefit of humanity.

Since its inception, OpenAI has operated as a hybrid organization, with a for-profit entity governed by a nonprofit umbrella designed to ensure its alignment with its charitable mission. While it has shifted toward capitalizing on the financial success of generative AI, OpenAI’s for-profit entity is still ultimately bound to the nonprofit’s mission. This transition has drawn sharp criticism from Musk, who has repeatedly argued that the shift to profit-oriented goals betrays the spirit of the organization's original vision.

Musk's move to take control escalated dramatically on Monday, when his AI venture, xAI, alongside several investment firms, submitted a formal bid to acquire the nonprofit that controls OpenAI. A follow-up court filing on Wednesday further outlined the proposed takeover, which Musk argued was necessary to restore OpenAI’s commitment to its nonprofit roots.

However, OpenAI’s legal counsel quickly responded, denouncing the bid as “not a bid at all,” with Savitt asserting that the filing introduced new conditions that made the offer non-viable. "Even in its original form, the board has unanimously rejected this proposal," the letter concluded.

Musk's legal battle with OpenAI has also extended to Microsoft, its major business partner. Last year, Musk added new claims to his lawsuit, accusing OpenAI of anti-competitive behavior, while also seeking a court order to halt OpenAI’s for-profit conversion. Musk has positioned his AI company, xAI, as a plaintiff in the case, alleging that OpenAI’s actions are harming competition in the AI industry.

A judge is still deliberating over Musk's request for an injunction, with some skepticism expressed during a court hearing last week regarding the validity of his claims.