OpenAI Rejects Elon Musk’s $97.4 Billion Takeover Bid \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ OpenAI’s board has unanimously rejected Elon Musk’s $97.4 billion takeover bid, affirming that the company is not for sale. Musk, an early OpenAI investor, has been in a legal battle with the AI firm, accusing it of deviating from its nonprofit mission. OpenAI, which aims to expand its for-profit operations, remains firm in its decision to reject Musk’s acquisition attempt.
OpenAI’s Takeover Rejection: Quick Looks
- Unanimous Board Decision – OpenAI’s board dismissed Musk’s $97.4 billion buyout offer.
- Legal Battle – Musk has sued OpenAI, alleging it abandoned its nonprofit mission.
- AI Competition – OpenAI is moving toward a for-profit structure, while Musk’s xAI competes in the field.
- Court Filing Issues – OpenAI’s attorney argues Musk’s bid lacks legitimacy.
- Judge’s Skepticism – Musk’s claims against OpenAI are under judicial review.
Deep Look
OpenAI has officially dismissed a $97.4 billion takeover bid from Elon Musk, reinforcing its stance as an independent AI leader. The company’s board of directors unanimously rejected the proposal, stating that OpenAI is not for sale and that Musk’s efforts are an attempt to undermine the competition.
This decision adds fuel to the ongoing legal battle between Musk and OpenAI, a dispute that has been brewing for nearly a year. Musk, an early investor in the company, has accused OpenAI of straying from its original nonprofit mission and prioritizing commercial gains.
Board Stands Firm Against Musk’s Offer
Bret Taylor, chair of OpenAI’s board, released a strong statement rejecting Musk’s bid, signaling that OpenAI has no intention of selling itself to its former co-founder and backer.
“OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition.”
Backing this stance, OpenAI’s legal team also dismissed the bid as not in the company’s best interests. In a letter sent on Friday to Musk’s attorney, OpenAI’s lawyer William Savitt emphasized that the proposal was unacceptable and that recent court filings from Musk’s team introduced new material conditions, further undermining the legitimacy of the offer.
“As a result of that filing, it is now apparent that your clients’ much-publicized ‘bid’ is in fact not a bid at all.”
Regardless of these additional details, Savitt stated that even the original offer was unanimously rejected by OpenAI’s leadership.
Musk’s Legal Battle Against OpenAI
Musk has been entangled in a legal dispute with OpenAI for nearly a year, claiming that the company has abandoned its nonprofit mission in favor of commercial success. He argues that OpenAI’s shift toward a for-profit model violates the original vision he and others laid out when they helped establish the organization.
Musk’s Investment and Betrayal Claims
Musk played a pivotal role in OpenAI’s early years, investing approximately $45 million in the company from its founding until 2018. At that time, OpenAI was structured as a nonprofit organization with the goal of developing artificial intelligence for the benefit of humanity.
However, since Musk’s departure, OpenAI has undergone significant transformation. It created a for-profit subsidiary to secure funding and accelerate AI research, forging partnerships with companies like Microsoft, which now plays a key role in OpenAI’s infrastructure. Musk believes this shift constitutes a betrayal of OpenAI’s original mission, leading him to sue the company for breach of contract.
In recent legal filings, Musk expanded the lawsuit to include Microsoft, arguing that the tech giant’s involvement has steered OpenAI away from its nonprofit obligations. He has also sought a court order to prevent OpenAI from fully transitioning into a for-profit entity.
Musk’s Takeover Attempt: A Bid to Control OpenAI
Musk’s attempt to acquire OpenAI represents his latest move in a broader battle for dominance in artificial intelligence. On Monday, Musk, his AI startup xAI, and a group of investment firms announced an ambitious plan to buy the nonprofit that controls OpenAI.
This proposal, detailed in a Wednesday court filing, aimed to gain control of OpenAI’s governing body, which oversees the organization’s strategic direction. However, OpenAI’s board and legal representatives dismissed the bid outright, questioning its authenticity and motives.
Savitt’s letter highlighted that Musk’s court filing introduced new, unexpected conditions to the proposal, casting doubt on whether it was ever a serious offer. OpenAI sees this as part of Musk’s broader strategy to disrupt a major competitor in the AI space.
“Your clients’ much-publicized ‘bid’ is in fact not a bid at all.”
AI Power Struggle: OpenAI vs. xAI
Musk’s rejection by OpenAI is only one chapter in the ongoing AI rivalry between his company, xAI, and OpenAI. Since launching xAI in 2023, Musk has positioned his startup as a direct competitor to OpenAI, developing advanced AI models like Grok to rival OpenAI’s ChatGPT.
Musk has claimed that OpenAI’s current leadership has abandoned transparency and open-source principles, favoring profit-driven motives. This clash of visions reflects broader industry debates over AI governance, ethics, and accessibility.
OpenAI’s Push Toward a For-Profit Model
Despite Musk’s objections, OpenAI has steadily moved toward a for-profit business structure. While still officially under the umbrella of a nonprofit parent organization, OpenAI is now considering steps to fully transition into a commercial entity. However, this would require buying out the nonprofit’s assets, a move that could reshape the company’s future.
Musk has sought to derail this process by arguing in court that OpenAI’s transition violates its foundational agreements. By adding xAI as a plaintiff in his lawsuit, he has also claimed that OpenAI is using unfair tactics to stifle AI competition.
Judge Questions Musk’s Claims
Despite Musk’s aggressive legal strategy, a judge reviewing the case recently expressed skepticism about some of his arguments. While Musk has accused OpenAI of violating its original mission, the judge’s comments suggest that his case may face significant hurdles in court.
Musk’s legal challenge could take months or even years to resolve, and in the meantime, OpenAI continues to solidify its commercial partnerships and AI leadership. Microsoft remains a key ally, investing billions into OpenAI’s infrastructure and helping deploy its AI models across consumer and enterprise products.
What’s Next?
The power struggle between Musk and OpenAI is far from over. While OpenAI has successfully blocked Musk’s takeover attempt, the legal battle remains ongoing. Key developments to watch in the coming months include:
- Court Rulings: Whether Musk’s lawsuit against OpenAI and Microsoft gains traction.
- AI Market Competition: How xAI’s products stack up against OpenAI’s technology.
- OpenAI’s For-Profit Shift: Whether OpenAI manages to complete its transition into a full-fledged commercial entity.
- Regulatory Scrutiny: Whether government agencies intervene in AI governance disputes.
Musk’s rejection by OpenAI signals that the AI arms race is more intense than ever, with tech giants and AI pioneers battling for dominance in one of the most transformative industries of the 21st century.
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