Musk’s Proposal to Acquire OpenAI Rejected Again

The Board of Directors of OpenAI, the US artificial intelligence (AI) firm, rejected an offer made by a consortium of companies led by Elon Musk to buy the company for $97.4 billion a couple of days ago.

In a post on X on Friday, OpenAI chair Bret Taylor said that OpenAI was not for sale, and the board has unanimously rejected Musk’s latest attempt to disrupt his competition. As soon as the offer was made, OpenAI’s CEO Sam Altman responded quickly and turned down the proposal early this week.

“No thank you but we will buy twitter (Owned by Elon Musk) for $9.74 billion if you want,” Altman said on X. OpenAI attorney William Savitt in a letter to Musk’s attorney on Friday said the proposal was not in the best interests of OpenAI’s mission and was rejected.

According to reports, Musk’s bid could still complicate things for OpenAI, which is in the midst of transitioning into a for-profit company. The board has to do what’s best for the non-profit, and that will mean having to prove that Altman’s spinoff plan leaves it in a better place than Musk’s offer would have.

On Wednesday, Musk’s lawyers said in a court filing that the billionaire will withdraw his offer if OpenAI agrees to remain a nonprofit company, the reports said.

Taylors suggested that concession was off the board. Any potential reorganisation of OpenAI will strengthen our non-profit and its mission to ensure AGI benefits all of humanity, he said.

According to an Associated Press (AP) report, OpenAI has increasingly sought to capitalise on the commercial success of generative AI. But the for-profit company is a subsidiary of a non-profit entity that’s bound to a mission — which Musk helped set — to safely build better-than-human AI for humanity’s benefit.

OpenAI is now seeking to more fully convert itself to a for-profit company, but would first have to buy out the non-profit’s assets.

Throwing a wrench in those plans, Musk and his own AI start-up, xAI, and a group of investment firms announced a bid Monday to buy the non-profit that controls OpenAI. Musk in a court filing on Wednesday further detailed the proposal to acquire the nonprofit’s controlling stake, the AP report said.

Savitt’s letter on Friday said that the court filing added 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. In any event, even as first presented, the board has unanimously rejected it,” William Savitt added.

Terms Violated

Musk has alleged in the lawsuit that OpenAI is violating the terms of his foundational contributions to the charity. Musk had invested about $45 million in the start-up from its founding until 2018, his lawyer said.

Musk escalated the legal dispute late last year, adding new claims and defendants, including OpenAI’s business partner Microsoft, and asking for a court order that would halt OpenAI’s for-profit conversion.

Musk also added xAI as a plaintiff claiming that OpenAI was also unfairly stifling business competition, the AP report said.