OpenAI Rejects $97.4 Billion Bid from Elon Musk-Led Team, Sparking New Controversy
San Francisco, CA – OpenAI, the artificial intelligence powerhouse behind ChatGPT, has rebuffed a substantial $97.4 billion offer from a consortium spearheaded by Elon Musk, escalating the ongoing conflict between the company and its co-founder. The OpenAI board, emphasizing its commitment to its foundational principles, declared the startup is not for sale, and the bid itself lacked genuine intent.
The rejected offer represents Elon Musk’s latest attempt to influence OpenAI’s trajectory, a company he helped establish but departed from in 2019. According to a statement issued by OpenAI Chairman Bret Taylor, on behalf of the board, “OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition. Any potential reorganization of OpenAI will strengthen our nonprofit and its mission to ensure AGI benefits all of humanity”.
Musk’s legal representative, Marc Toberoff, immediately refuted the board’s claims. Toberoff accused OpenAI of prioritizing the financial gains of certain board members over its charitable goals, asserting that the board’s actions will enrich itself.
The friction between Musk and OpenAI originates from the company’s decision in 2019 to incorporate a for-profit division, a move that has since drawn significant investment, notably from Microsoft. Musk has been a vocal critic of this development, arguing that it deviates from OpenAI’s initial objective of ensuring that advanced artificial general intelligence (AGI) benefits the public good, rather than prioritizing profit. This critique culminated in a lawsuit filed in August 2023 against Sam Altman, OpenAI, and Microsoft, which remains unresolved.
Adding to the controversy, OpenAI has recently announced plans to restructure its corporate framework, aiming to create a public benefit corporation. This structure is designed to streamline capital acquisition and reduce restrictions imposed by its non-profit parent organization. This proposed restructuring has further solidified Musk’s opposition, as he actively seeks to prevent OpenAI from fully transitioning to a for-profit enterprise.
Musk’s consortium, which includes his own AI venture, xAI, alongside entities like Valor Equity Partners, Baron Capital, and entertainment figure Ari Emanuel, had proposed to acquire OpenAI’s non-profit entity, contingent on the company abandoning its for-profit plans. This proposal, however, was deemed insincere and rejected by the OpenAI board.
The rejection follows a series of public exchanges between the two parties. After the bid was made public, Altman responded with a terse “no thank you” on X, prompting Musk to label him a “swindler.” Altman subsequently restated, in an interview with Axios, that OpenAI was not for sale. Moreover, Musk’s lawyers stated in a court filing that the consortium would withdraw its bid if OpenAI dropped its for-profit plans. However, OpenAI’s legal counsel, led by William Savitt, countered in a formal letter, claiming the consortium introduced new conditions to the proposal, thereby invalidating it. The situation suggests that this is far from over and could go to court.
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