OpenAI’s board of directors has unanimously rejected a $97.4 billion acquisition offer from an investor group led by Elon Musk, marking the latest chapter in the ongoing rivalry between Musk and OpenAI CEO Sam Altman. The unsolicited bid, submitted on Monday, was swiftly dismissed by board chair Bret Taylor, who stated that “OpenAI is not for sale” and characterized Musk’s attempt as an effort to “disrupt his competition.”
The rejection comes amid OpenAI’s planned reorganization, which the board says will strengthen its nonprofit mission to ensure artificial general intelligence (AGI) benefits all of humanity. However, Musk’s legal team, represented by attorney Marc Toberoff, has criticized the board’s response as “deflective double-talk,” alleging that OpenAI’s reorganization amounts to a “self-dealing transaction” that enriches board members and executives at the expense of the charity.
CEO Sam Altman addressed the bid publicly at an AI summit in Paris, dismissing it as just another episode in Musk’s long-running attempts to gain control of OpenAI. “There’s been like versions of Elon trying to, you know, somehow take control of OpenAI for a long time, so, it’s like, okay, here’s this week’s episode,” Altman told Axios, reiterating that the company and its mission are not for sale.
The conflict between Musk and OpenAI has deep roots. Musk co-founded OpenAI with Altman years ago but departed in 2018 to establish his own AI venture, xAI. Since then, the relationship has deteriorated significantly, with the two tech leaders publicly clashing over their divergent visions for AI development. Musk has filed multiple lawsuits against OpenAI, including a February 2024 suit alleging the company violated its founding principles, which he later withdrew, and an August suit claiming he was “manipulated” into co-founding the organization.
In his statement accompanying the acquisition proposal, Musk positioned his offer as an attempt to return OpenAI to its original values, stating: “At x.AI, we live by the values I was promised OpenAI would follow. We’ve made Grok open-source, and we respect the rights of content creators. It’s time for OpenAI to return to the open-source, safety-focused force for good it once was.”
The board’s fiduciary duties are now under scrutiny, with Musk’s legal team questioning whether the rejection serves the nonprofit’s charitable mission or primarily benefits insiders involved in the planned reorganization.
Key Quotes
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.
Bret Taylor, chair of OpenAI’s board, issued this definitive statement rejecting Musk’s acquisition bid. The quote frames Musk’s offer as a competitive maneuver rather than a genuine attempt to restore OpenAI’s original mission, while emphasizing the board’s commitment to its nonprofit purpose.
There’s been like versions of Elon trying to, you know, somehow take control of OpenAI for a long time, so, it’s like, okay, here’s this week’s episode.
Sam Altman, OpenAI’s CEO, made this dismissive comment to Axios at an AI summit in Paris. His casual tone suggests he views Musk’s bid as part of a pattern of attempts to influence or control OpenAI, rather than a serious acquisition proposal worthy of consideration.
Of course they’re putting the charity’s assets (control of the for-profit enterprise) up for sale. That’s what their ‘reorganization’ is all about. They’re just selling it to themselves at a fraction of what Musk has offered, enriching Board members, Altman, Brockman, and others rather than the charity in a classic self-dealing transaction.
Marc Toberoff, attorney for Musk’s investor group, leveled this serious accusation against OpenAI’s board. The statement alleges that the board is engaging in self-dealing by restructuring the company in ways that benefit insiders while rejecting a higher-value external offer, raising questions about fiduciary responsibility.
At x.AI, we live by the values I was promised OpenAI would follow. We’ve made Grok open-source, and we respect the rights of content creators. It’s time for OpenAI to return to the open-source, safety-focused force for good it once was.
Elon Musk framed his acquisition bid as an ideological mission to restore OpenAI’s founding principles. This statement positions his competing AI company, xAI, as the true heir to OpenAI’s original open-source vision, while criticizing OpenAI’s evolution toward a more closed, commercial model.
Our Take
This rejection reveals how dramatically the AI landscape has shifted since OpenAI’s founding. What began as an idealistic nonprofit has become a commercial powerhouse, creating inevitable tensions between original principles and market realities. Musk’s bid, while framed as principled, appears strategically motivated—acquiring OpenAI would eliminate his primary competitor and consolidate enormous AI capabilities under his control.
The self-dealing allegations deserve scrutiny. If OpenAI’s reorganization genuinely enriches insiders at the nonprofit’s expense, it could undermine public trust in AI governance structures. However, the board’s fiduciary duty extends beyond maximizing sale price—it must consider mission alignment, and selling to Musk could compromise OpenAI’s independence and direction.
This conflict ultimately reflects broader questions about AI power concentration. Whether controlled by Altman or Musk, OpenAI represents extraordinary influence over humanity’s AI future. The real concern isn’t which billionaire controls the company, but whether any single entity should wield such power over transformative technology that affects everyone.
Why This Matters
This high-stakes corporate battle represents a pivotal moment in AI industry governance and control. OpenAI has emerged as the leading force in commercial AI development following ChatGPT’s explosive success, making control of the company extraordinarily valuable. The rejection highlights fundamental tensions about how AI companies should be structured and governed—particularly those that began as nonprofits but have evolved into hybrid entities worth tens of billions of dollars.
The dispute raises critical questions about AI development philosophy: should leading AI companies remain open-source and nonprofit-focused, or can they pursue commercial success while maintaining their original missions? Musk’s criticism of OpenAI’s shift away from open-source development resonates with broader industry debates about transparency, safety, and accessibility in AI advancement.
For the AI industry, this conflict could influence future corporate structures and governance models. As AI companies navigate the tension between nonprofit missions and commercial imperatives, OpenAI’s reorganization and its handling of Musk’s bid may set precedents for how similar organizations balance stakeholder interests. The outcome could also impact competitive dynamics in the AI sector, where consolidation and control of leading technologies remain contentious issues with implications for innovation, safety, and equitable access to transformative AI capabilities.
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