OpenAI’s board chairman announced on Friday that the company has unanimously rejected Elon Musk’s $97.4 billion offer to acquire the artificial intelligence firm.
“OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition,” said board chairman Bret Taylor in a statement posted on Musk-owned X, formerly Twitter.
He added, “Any potential reorganization of OpenAI will strengthen our nonprofit and its mission to ensure AGI (artificial general intelligence) benefits all of humanity.”
Musk filed court documents on Wednesday stating that he would withdraw his offer to buy OpenAI if its board returns to a non-profit “charity” model.
OpenAI currently operates under a hybrid structure, functioning as a non-profit with a for-profit subsidiary.
The shift to a for-profit model—considered crucial by CEO Sam Altman for the company’s development—had fueled ongoing tensions with Musk.
Musk and Altman were among the 11 founding members of OpenAI in 2015, with Musk initially investing $45 million in the venture.
Three years later, in 2018, Musk left OpenAI, with the company citing “a potential future conflict for Elon… as Tesla continues to become more focused on AI.”
In 2023, Musk launched his own AI company, xAI, after OpenAI sparked global enthusiasm for artificial intelligence technology.
The massive costs associated with developing, training, and deploying AI models have pushed OpenAI to seek a new corporate structure, allowing investors to acquire equity and ensuring more stable governance.
However, transitioning to a traditional for-profit company requires approval from California and Delaware authorities, who will scrutinize how OpenAI’s nonprofit arm is valued when it becomes a shareholder in the new entity.
Current investors favor a lower valuation to maximize their stake in the restructured company.
Meanwhile, Musk’s bid, valuing OpenAI’s nonprofit at $97.4 billion—about $30 billion higher than the current negotiations, according to The Information—appears aimed at disrupting the company’s fundraising efforts.
OpenAI’s Chief Global Affairs Officer, Chris Lehane, stated that Musk’s offer came from a competitor “who has struggled to keep up with the technology and compete with us in the marketplace.”
