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OpenAI’s board of directors has "unanimously" rejected a takeover bid from Elon Musk.
The news comes after Musk and a consortium of investors, including Musk's own xAI, submitted an unsolicited bid to buy OpenAI earlier this week for $97.4 billion, a move first reported by The Wall Street Journal.
In a statement on behalf of the board, OpenAI Chairperson Bret Taylor said Musk's offer is an “attempt to disrupt his competition,” adding that "OpenAI is not for sale."
“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 turned down the offer, posting “no thank you” on X, before making a 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 has filed suit over that transition. He first sued OpenAI and Altman in March 2023, alleging breach of contract because OpenAI has switched course from this founding mission. Roughly three months later, Musk dropped that lawsuit, but renewed the legal fight in August alleging wire fraud resulting in a "pattern of racketeering activity," breaches of contract, and false advertising, among other claims. He then added Microsoft to the proceedings.
In a court filing posted earlier this week, Musk's legal team offered to drop the unsolicited 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."
Musk is 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.