Off The Record
OpenAI Board Rejects Gigantic Offer From Elon Musk
A consortium led by billionaire Elon Musk made a $97.4 billion deal for the ChatGPT creator on Friday, but OpenAI rejected it, claiming the business is not for sale and that any further bid would be dishonest.
Musk’s newest attempt to prevent the venture he co-founded with OpenAI CEO Sam Altman, but later departed, from turning into a for-profit company in an effort to raise more money and maintain its lead in the artificial intelligence race, is the unsolicited approach.
“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,” it said on X, quoting OpenAI Chairman Bret Taylor on behalf of the board.
In a statement, Musk’s attorney Marc Toberoff retorted that OpenAI is offering to sell ownership of the for-profit company, claiming that the action will “enrich its certain board members rather than the charity.”
In late December, OpenAi announced plans to restructure, removing the limitations placed on the business by its present nonprofit parent and establishing a public benefit corporation to facilitate “raising more capital than we’d imagined.”
Altman on Monday had rebuffed the consortium’s offer with a “no thank you” posted on X, prompting Musk to retort: “swindler.” On Tuesday, Altman told news website Axios that OpenAI was not for sale.
In a court filing on Wednesday, Musk’s attorneys stated that if OpenAI abandons its intentions to turn into a for-profit company, the consortium—which includes Musk’s own AI startup, xAI—would revoke its offer for the non-profit division of the company.
“Two days ago, you filed a pleading in court adding 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,” the OpenAI board said, according to a letter signed by William Savitt, a lawyer representing the company, and sent to Toberoff on Friday.
Hollywood power broker Ari Emanuel, Baron Capital, and Valor Equity Partners are among the other investors in the consortium.
Musk and Altman have been at odds for a long time.
Following Musk’s departure in 2019, OpenAI established a for-profit division that has attracted billions of dollars in funding. Musk has since accused the firm of violating its initial objective by prioritizing profit over the greater welfare of society.
In August of last year, Musk filed a lawsuit alleging breach of contract against Altman, OpenAI, and its largest investor, Microsoft (MSFT.O), opens new tab.
Musk opened a new tab and requested a preliminary injunction from a federal court in November to prevent OpenAI from switching to a for-profit organization.
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