On Friday, OpenAI announced that its board of directors has “unanimously” declined billionaire Elon Musk’s proposal to acquire the nonprofit entity that governs the organization.
In a statement released on OpenAI’s official press account on X, Bret Taylor, the board chair, described Musk’s offer as “a maneuver to disrupt his competitors.”
“OpenAI is not for sale. The board has unanimously denied Mr. Musk’s recent attempt to disrupt his competitors,” stated Taylor. “Any future reorganization of OpenAI will bolster our nonprofit and its commitment to ensuring that [artificial general intelligence] benefits all of humankind.”
The New York Times reported that OpenAI also communicated with Musk’s attorney, Marc Toberoff, indicating that the acquisition proposal “does not align with [OpenAI’s] mission.”
Earlier this week, Musk, along with his AI firm xAI and a consortium of investors, proposed a $97.4 billion purchase of OpenAI’s nonprofit. The offer was swiftly dismissed—albeit informally—by OpenAI CEO Sam Altman and the board. In a statement, Andy Nussbaum, legal counsel for OpenAI’s board, asserted that Musk’s proposal “fails to establish a value for [OpenAI’s] nonprofit,” which is “not for sale.”
Musk, who was a co-founder of OpenAI, has previously filed a lawsuit against the organization and Altman, alleging anticompetitive practices and fraud, among other claims.
Originally founded as a nonprofit, OpenAI transitioned to a “capped-profit” model in 2019. The nonprofit remains the sole controlling entity of the capped-profit corporation, which retains fiduciary obligations to its charter. Currently, OpenAI is undergoing another transition, moving towards a traditional for-profit model as a public benefit corporation. However, Musk is attempting to halt this shift through his lawsuit.
In a court submission on Wednesday, Musk’s legal team indicated that he would retract his bid if OpenAI’s board commits to “preserving the charity’s mission” and ceases the conversion to a for-profit model. Earlier that same day, in a filing, OpenAI’s attorneys cited Musk’s effort to gain control as “an inappropriate bid to undermine a competitor,” contradicting his claim in court that reorganization would violate the charity’s mission as a trust.
Tensions escalated this week as Musk’s supporters and Altman exchanged criticisms over the bid. In a podcast interview on Thursday, Ari Emanuel, a supporter of Musk’s nonprofit acquisition, labeled Altman a “phony,” accusing him of attempting to undermine the charity and its original mission. In response, Altman characterized Musk’s proposal as “a tactic to slow [OpenAI] down,” adding that Musk operates “from a position of insecurity.”
Compiled by Techarena.au.
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