OpenAI has announced that its board has unanimously turned down a $97.4 billion acquisition proposal from Elon Musk.
โOpenAI is not for sale, and the board has unanimously rejected Mr. Muskโs latest attempt to disrupt his competition,โ stated Bret Taylor, the chair of OpenAIโs board, in a statement released on Friday.
In a correspondence directed to Muskโs attorney, OpenAI lawyer William Savitt expressed that the bid โis not in the best interests of OAIโs mission and is rejected.โ
Musk, one of the early backers of OpenAI, initiated legal action against the organization almost a year ago, claiming breach of contract, arguing that the organization has strayed from its foundational purpose as a nonprofit.
OpenAI has increasingly shifted focus to leverage the financial success brought on by generative AI technologies. However, it operates as a for-profit entity under the umbrella of a nonprofit organization with a mission โ a mission that Musk was instrumental in shaping โ to develop AI that surpasses human capabilities safely for the benefit of humanity.
OpenAI is considering a more significant transition toward being a fully profit-oriented company, which would necessitate acquiring the assets of the nonprofit that currently holds its operations.
Elon Musk, along with his AI startup xAI and a consortium of investment firms, recently introduced a bid to purchase the controlling nonprofit organization behind OpenAI. In a recent court document, Musk articulated further details regarding this intent to acquire the nonprofitโs stake.
Savittโs letter made it clear that this recent legal filing introduced โnew material conditions to the proposal.โ Consequently, he stated that it has become evident that the widely reported โbidโ from Musk and his associates is not a genuine bid. Even in its original form, the board has formally rejected Muskโs proposal, Savitt noted.
In his ongoing lawsuit, Musk has accused OpenAI of breaching the terms associated with his significant early contributions to the organization. Reports indicate that Musk heavily invested approximately $45 million in the company from its inception until 2018.
Musk intensified the legal battle towards the end of last year, incorporating additional claims and defendants, including OpenAIโs partner Microsoft, while seeking a court mandate to prevent OpenAIโs transition to for-profit status. Musk has also included xAI as a plaintiff, suggesting that OpenAI is unfairly suppressing competition in the business realm. A judge is currently deliberating Muskโs request, though he expressed doubt regarding some of Muskโs allegations during a court session last week.