The battle over OpenAI’s future took another dramatic turn as its board of directors formally rejected a $97.4 billion buyout offer from a group of investors led by Elon Musk. The bid, which aimed to acquire the nonprofit that controls OpenAI, was swiftly dismissed, with board members reaffirming their commitment to the company’s mission.
In a statement released Friday, Bret Taylor, OpenAI’s chairman, made it clear that the company had no interest in Musk’s proposal. “OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition.”
Musk, who co-founded OpenAI in 2015 before launching a rival AI startup, assembled a consortium of influential investors to back his takeover attempt. Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, 8VC (led by Joe Lonsdale), and investor Ari Emanuel all joined the bid.
Musk positioned his offer as a way to restore OpenAI’s original vision—a nonprofit, open-source AI organization focused on safety and transparency. However, OpenAI executives saw the bid as nothing more than a competitive maneuver. CEO Sam Altman dismissed it outright, calling it an attempt to “slow us down.”
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This rejection is just the latest chapter in Musk’s ongoing conflict with OpenAI. The billionaire has already filed two lawsuits against the company, accusing it of deviating from its founding principles and transforming into a for-profit powerhouse.
One of Musk’s main grievances is OpenAI’s corporate restructuring, which would further transition it toward a conventional for-profit business model.
His legal team argued that OpenAI’s leadership is effectively selling the nonprofit’s assets to themselves at a discount, rather than entertaining offers from external buyers. “Will someone please explain how that benefits ‘all of humanity’?” asked Marc Toberoff, Musk’s lawyer, in a statement following the board’s decision.
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Meanwhile, OpenAI’s legal counsel, Andrew Nussbaum, reinforced the board’s stance, emphasizing that their sole duty is to ensure AI development benefits humanity—not to cater to competitor interests. “Respectfully, it is not up to a competitor to decide what is in the best interests of OpenAI’s mission.”
While the board rejected Musk’s offer, his $97.4 billion valuation of the nonprofit has created complications for OpenAI’s restructuring plans.
Currently, the nonprofit governs a for-profit subsidiary, and under the proposed reorganization, it is expected to receive compensation in equity rather than a direct cash payout.
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Legal experts suggest that Musk’s high-stakes offer could pressure OpenAI to assign a higher value to its nonprofit, which might impact the equity stakes of current and future investors.
“OpenAI’s board is on perfectly solid footing to say no to Musk’s bid,” said Robert Bartlett, a corporate governance expert at Stanford Law School. “But that doesn’t mean they can ignore the ramifications on how OpenAI’s nonprofit assets are valued.”
Musk’s bid is likely to complicate OpenAI’s efforts to raise additional funding. The company is currently in discussions with SoftBank Group Corp. for a potential $300 billion valuation, and investors will be closely watching how this latest controversy plays out.
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