SAN FRANCISCO — The board of ChatGPT-maker OpenAI unanimously rejected Elon Musk’s unsolicited proposal to buy the company, accusing the tech billionaire of using the bid as a legal maneuver in an ongoing court case he has against OpenAI.
Musk and a consortium of investors who have supported his ventures in the past offered to buy all the assets of OpenAI for $97.4 billion Monday — a price well below the valuation the AI firm has received from its investors.
On Wednesday, Musk’s lawyers said he would drop the bid if OpenAI agreed to end its plan to transition from a nonprofit into a for-profit company, which Musk is trying to block through a lawsuit he launched last year.
On Friday, OpenAI lawyer William Savitt wrote in a letter to Musk’s attorney Marc Toberoff that Wednesday’s filing made clear the acquisition offer wasn’t serious. “It is now apparent that your clients’ much-publicized ‘bid’ is in fact not a bid at all,” he wrote, in a copy of the letter provided by an OpenAI spokesperson.
“In any event, your clients’ proposal, even as first presented, is not in the best interests of [OpenAI]’s mission and is rejected,” Savitt wrote.
Toberoff did not immediately comment.
OpenAI, which Musk helped to found — and fund — in 2015 before leaving the company in 2018 after clashing with other leaders over control of the company, is trying to transition from a nonprofit with a huge commercial division into a more traditional for-profit company.
That nonprofit and its board, sworn to develop AI technology for the benefit of humanity, ultimately controls all of OpenAI’s assets and technology.
OpenAI CEO Sam Altman has said becoming a more conventional tech company is necessary to secure the massive amounts of investment needed for the company to keep up in the expensive race to develop and run ever more capable AI. Leading tech companies like Meta, Google and Microsoft have each committed tens of billions of dollars to the AI race.
Musk claims OpenAI’s restructuring plan breaks its original commitment to develop technology for the benefit of humanity. He launched his own rival artificial intelligence company, xAI, provider of the chatbot Grok, in 2023.