OpenAI board rejects Musk’s $97.4 billion offer

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Elon Musk's unsolicited move is his latest attempt to stop the startup he co-founded with Sam Altman — but later left — from going for-profit as it seeks more funding to stay ahead in AI race

OpenAI on Friday, February 14, rejected a $97.4 billion bid from a consortium led by billionaire Elon Musk for the ChatGPT maker, saying the startup is not for sale and that any future bid would be disingenuous.

The unsolicited approach is Musk’s latest attempt to block the startup he co-founded with OpenAI CEO Sam Altman — but later left — from becoming a for-profit firm, as it looks to secure more capital and stay ahead in the artificial intelligence race.

“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,” it said on X, quoting OpenAI Chairman Bret Taylor on behalf of the board.

Musk’s lawyer Marc Toberoff, in a statement, responded that OpenAI is putting control of the for-profit enterprise up for sale, and said the move will “enrich its certain board members rather than the charity.”

OpenAi in late December had outlined plans to revamp its structure, saying it would create a public benefit corporation to make it easier to “raise more capital than we’d imagined,” and remove the restrictions imposed on the startup by its current nonprofit parent.

Altman on Monday, February 10, had rebuffed the consortium’s offer with a “no thank you” posted on X, prompting Musk to retort: “swindler.” On Tuesday, February 11, Altman told news website Axios that OpenAI was not for sale.

Musk’s lawyers, in a court filing on Wednesday, February 12, said the consortium, which includes Musk’s own AI startup xAI, would withdraw its bid for OpenAI’s non-profit arm if it drops plans to become a for-profit entity.

“Two days ago, you filed a pleading in court adding new material conditions to the proposal. As a result of that filing, it is now apparent that your clients’ much publicized ‘bid’ is in fact not a bid at all,” the OpenAI board said, according to a letter signed by William Savitt, a lawyer representing the company, and sent to Toberoff on Friday.

Other investors in the consortium include Valor Equity Partners, Baron Capital, and Hollywood power broker Ari Emanuel.

Altman and Musk have been at loggerheads for years.

After Musk’s departure in 2019, OpenAI created a for-profit arm that has drawn billions of dollars in funding, sparking allegations from Musk that the startup breached its original mission by putting profit ahead of the larger public good.

Musk sued Altman, OpenAI, and its biggest backer, Microsoft, in August last year for alleged breach of contract.

In November, Musk asked a federal court for a preliminary injunction to block OpenAI from moving to a for-profit structure. – Rappler.com