OpenAI’s Board Unanimously Rejects Elon Musk’s Bid to Acquire Nonprofit

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OpenAI’s board of directors has taken a decisive stand against billionaire Elon Musk’s recent offer to acquire the nonprofit that governs the organization. In a statement released on X, board chair Bret Taylor announced that the bid was “unanimously” rejected, dismissing it as “an attempt to disrupt his competition.”

The Bid and Its Immediate Dismissal

On Monday, Musk, together with his AI company xAI and a consortium of investors, put forward an offer valued at $97.4 billion to purchase the nonprofit. However, CEO Sam Altman and the board quickly, albeit informally, dismissed the proposal. Andy Nussbaum, counsel for the board, stressed that Musk’s bid “doesn’t set a value for [OpenAI’s] nonprofit” and reiterated that the nonprofit is “not for sale.”

Further intensifying the situation, The New York Times reported that OpenAI had sent a letter to Musk’s lawyer, Marc Toberoff, stating that the bid was “not in the best interests of [OpenAI’s] mission.”

Legal Tensions and Historical Context

This high-stakes move comes against a backdrop of ongoing legal disputes. Musk, one of OpenAI’s co-founders, filed a lawsuit last year against the company and Sam Altman, alleging anticompetitive behavior and fraud, among other charges. The current bid appears to be another front in the escalating conflict between Musk and OpenAI.

Founded originally as a nonprofit, OpenAI transitioned to a “capped-profit” model in 2019. Under this structure, the nonprofit retains control as the sole shareholder of the capped-profit entity, ensuring that its operations remain aligned with its founding mission. Today, OpenAI is in the midst of restructuring into a traditional for-profit company—a public benefit corporation. Musk’s legal challenges include efforts to enjoin this conversion, arguing that a transfer of assets via restructuring would breach the organization’s charitable trust mission.

Divergent Reactions and High-Profile Disputes

The controversy has sparked public and industry debate. In a recent court filing, Musk’s lawyers stated that the bid would be withdrawn if OpenAI’s board committed to preserving the charity’s mission and halted its conversion to a for-profit model. Conversely, OpenAI’s attorneys have characterized Musk’s move as “an improper bid to undermine a competitor,” highlighting a fundamental contradiction with his earlier court arguments.

Adding fuel to the fire, a podcast interview on Thursday featured a heated exchange between Musk’s allies and Altman. Ari Emanuel, one of the backers of Musk’s proposal, lashed out at Altman, calling him a “phony” who was “trying to get away with cheating the charity and its original mission.” Altman retorted by dismissing Musk’s bid as “an attempt to slow [OpenAI] down,” suggesting that Musk’s actions stem from a position of personal insecurity.

Broader Implications for AI and Corporate Governance

This unfolding drama underscores the complex intersection of innovation, corporate governance, and legal oversight within the fast-evolving field of artificial intelligence. As OpenAI continues its restructuring amidst these legal battles, industry observers are keenly watching how the organization will navigate the tension between its nonprofit origins and its push toward a for-profit future.

Looking Ahead

In related news for tech enthusiasts, TechCrunch Disrupt 2025 is on the horizon. Set to take place in San Francisco, CA from October 27-29, the event promises to deliver groundbreaking insights into AI, startups, fintech, space, IPOs, and more. With a series of main stages, breakout sessions, roundtables, and extensive networking opportunities, Disrupt 2025 is poised to be a must-attend event for anyone following the latest tech innovations.

As the battle between Musk and OpenAI continues to unfold, stakeholders and observers alike remain eager to see how these developments will shape the future of AI and its governance.