The $97.4 billion bid by Elon Musk and a group of investors to acquire control of OpenAI was rejected by the company’s board of directors on Friday. This decision further intensified the ongoing conflict between Mr. Musk and OpenAI’s CEO, Sam Altman.
Board chairman Bret Taylor stated, “OpenAI is not for sale, and Mr. Musk’s attempt to disrupt his competitors has been unanimously declined by the board.” Mr. Taylor specifically referenced Mr. Musk’s own A.I. company, xAI.
OpenAI conveyed in a letter to Marc Toberoff, the attorney representing Mr. Musk and the investors, that the bid was not aligned with the organization’s mission of creating A.I. for the benefit of all humanity.
Mr. Musk’s interference in OpenAI’s plans to alter its corporate structure by offering to purchase the nonprofit’s assets has caused tension between him and Mr. Altman, who aims to shift control to the company’s investors, including Microsoft.
In response to the rejection, Mr. Toberoff criticized Altman and Taylor for dismissing Musk’s bid and accused them of engaging in self-dealing. He insisted that OpenAI was indeed selling the nonprofit’s assets, but at a significantly lower value than what Musk had offered.
Mr. Musk’s history with OpenAI has been tumultuous, as conflicts over control of the company led to his departure in 2018. Altman subsequently linked OpenAI to a for-profit entity to secure funding for A.I. projects.
The ongoing power struggle between Musk and Altman may impact OpenAI’s plans to transition its control to investors. Musk’s bid of $97.4 billion could complicate this process, requiring compensation to separate OpenAI from the nonprofit board.
Mr. Musk’s bid was an attempt to establish the value of OpenAI’s assets, as they have not been officially evaluated. Additionally, he filed a lawsuit last year to block the restructuring plans of the organization.
California’s attorney general, Robert Bonta, raised concerns over OpenAI’s shift to a for-profit structure and stated that the state is closely monitoring the situation, including Mr. Musk’s involvement.
While battling OpenAI, Musk is also seeking funding for his company xAI, which is in discussions for a new financing round that could value it at $75 billion, up from $40 billion just two months ago.
xAI had previously raised $6 billion for infrastructure and research and development, with support from investors like BlackRock and Fidelity. Meanwhile, The New York Times has sued OpenAI and Microsoft for copyright infringement related to A.I. news content.