OpenAI’s board on Friday unanimously rejected Elon Musk’s $97.4 billion bid to acquire the ChatGPT parent company.
The board, in a letter sent to Musk’s legal team, called into question the genuineness of the bid, pointing out his bid was “subject to numerous conditions,” but that it nevertheless rejected his bid because it was “not in the best interests” of OpenAI’s “mission.”
Musk’s unsolicited bid, which included Endeavor CEO Ari Emmanuel among its investors, was sent on Monday. On Wednesday, Musk said he would drop his bid on one condition: If OpenAI CEO Sam Altman ditched his plan to convert the company into a for-profit business.
That did not sit well with OpenAI’s board, apparently, based on the letter sent to Musk’s attorney.
“Two days ago, you filed a pleading in court adding new material conditions to the proposal,” the board’s letter said. “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 letter continued: “In any event, your clients’ proposal, even as first presented, is not in the best interests of OAI’s mission and is rejected. The decision of the OIA board on this matter is unanimous.”
Friday’s rejection comes after Altman swiftly denied any interest in the bid on Tuesday, saying “We’re not for sale.” He also took a little dig at Musk on X, adding, “No thank you … but we will buy Twitter for $9.74 billion if you want.” (Musk, of course, bought Twitter for $44 billion in 2022.)
Musk’s offer was the latest twist in his ongoing feud with Altman, who has been pushing to convert the company behind ChatGPT into a for-profit business. Musk co-founded OpenAI in 2015 alongside Altman and a handful of other executives, but Musk has vehemently opposed Altman’s plan to shift away from the company’s nonprofit status.
The X and Tesla boss sued Altman and another OpenAI founder last year over the move, saying they “betrayed” OpenAI’s founding principles.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk said in a statement provided to WSJ by his attorney, Marc Toberoff, on Monday. “We will make sure that happens.”
Musk, who stepped down from OpenAI’s board in 2018, joked it should change its name to “ClosedAI” in March 2024 due to its move away from its initial mission: providing open source AI technology that benefits everyone. And last September, the X owner shared his displeasure with OpenAI’s planned business restructuring.
“You can’t just convert a non-profit into a for-profit,” Musk posted. “That is illegal.”
OpenAI created a for-profit subsidiary a year after Musk’s departure, allowing it to raise money from Microsoft, its primary backer, and other investors. The company is currently aiming to raise funding at a $340 billion valuation; Bloomberg reported in September that Altman would end up with a 7% equity stake in OpenAI if it becomes a for-profit business, meaning his slice would be worth $23.8 billion if the company is valued at $340 billion.
Musk on Thursday announced Grok, X’s AI model, was a week or two away from unveiling its third version — a version he said outperforms all other AI models.
