OpenAI Board ‘Unanimously’ Rejects $97bn Musk Takeover Bid

OpenAI’s board of directors has “unanimously” rejected a bid by Tesla CEO Elon Musk to buy the nonprofit that governs the ChatGPT firm.

The news comes after Musk and a consortium of investors, including Musk’s own AI firm, xAI, submitted an unsolicited bid to buy OpenAI earlier this week for $97.4 billion, a move first reported by The Wall Street Journal.

OpenAI Chairperson Bret Taylor dubbed the offer by Musk an “attempt to disrupt his competition,” adding that “OpenAI is not for sale” in a statement on behalf of the board.

“Any potential reorganization of OpenAI will strengthen our nonprofit and its mission to ensure AGI benefits all of humanity,” he added.

OpenAI CEO Sam Altman had already publicly, but informally, turned down the offer, posting “no thank you” on Musk’s social media platform, X, before giving an informal counteroffer to buy X for “$9.74 billion if you want.”

The bid comes as OpenAI is in the process of radically changing its business model. OpenAI started life in 2015 as a nonprofit entity before later adopting a hybrid model in 2019, consisting of a nonprofit and a for-profit subsidiary. But it’s currently in the process of transitioning its for-profit division, into a Delaware Public Benefit Corporation a particular type of corporate structure whereby a company must balance making a profit for shareholders and public benefit.

Musk—one of OpenAI’s earliest investors—has been one of the harshest critics of its current direction. Musk first opened a lawsuit against OpenAI and Altman in March 2023, alleging a breach of contract over their for-profit transition. The allegations have piled up from Musk’s team, later expanding the case to include “racketeering activity” and false advertising, and eventually adding its largest investor, Microsoft, to the proceedings.

In a court filing posted earlier this week, Musk’s legal team offered to drop the unsolicted takeover offer if OpenAI was “prepared to preserve the charity’s mission and stipulate to take the “for sale” sign off its assets by halting its conversion.”

Aside from the legal action, Musk is now increasingly becoming a direct competitor of OpenAI. His AI firm, xAI—which produces X’s Grok chatbot—plans to expand its Colossus supercomputer in Memphis, Tennessee, to one million GPUs. Meanwhile, Bloomberg reports that xAI is canvassing investors for another funding round, which would take its total raised to $22.4 billion.

Musk’s $97.4 billion offer might be low for a company in OpenAI’s position according to some investors. The Wall Street Journal reported last month that OpenAI was in talks about a funding round that would value the company at as much as $340 billion, over three times what Musk’s team offered.

About Will McCurdy

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