The board of directors at OpenAI has firmly rejected a $97.4 billion buyout offer from Elon Musk and a consortium of investors, reinforcing its commitment to remaining independent. The decision underscores the nonprofit’s resolve to maintain control over the direction of artificial intelligence development, despite mounting external interest.
“OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition,” OpenAI chairman Bret Taylor said in a statement on Friday.
Musk’s Bid and OpenAI’s Financial Landscape
Musk, who co-founded OpenAI in 2015 before departing and launching his own AI company, xAI, had assembled a high-profile investment group to acquire OpenAI’s nonprofit assets. His backing included Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, and other major investors. Musk positioned the buyout as an effort to restore OpenAI’s original mission of transparency and open-source AI development.
The board’s rejection comes as the company is in discussions with SoftBank Group to raise fresh funding at a potential valuation of $300 billion. As part of its corporate restructuring, OpenAI plans to compensate its nonprofit parent with equity in its for-profit subsidiary, further solidifying its financial independence.
Ongoing Tensions Between Musk and OpenAI
The refusal marks another chapter in the contentious relationship between OpenAI and Musk. Initially launched as a nonprofit AI research lab, OpenAI later adopted a for-profit model to attract funding and scale its operations. Musk has been a vocal critic of this shift, arguing it strays from the company’s founding principles.
Earlier this week, Musk and his investor group formally submitted their bid to acquire OpenAI. Following the rejection, CEO Sam Altman humorously dismissed the offer on X, stating, “No thank you, but we will buy Twitter for $9.74 billion if you want.”
Taylor, who previously chaired the board of X (formerly Twitter) before Musk’s acquisition, reaffirmed the company’s mission. “Any potential reorganization of OpenAI will strengthen our nonprofit and its mission to ensure Artificial General Intelligence (AGI) benefits all of humanity,” he said.
Legal and Strategic Challenges Ahead
Marc Toberoff, an attorney representing Musk’s investor group, criticized OpenAI’s decision, calling it “no surprise” and questioning whether the board had a fiduciary duty to consider the bid in good faith. “They’re just selling it to themselves at a fraction of what Musk has offered,” Toberoff argued.
Musk has previously taken legal action against OpenAI, alleging the organization is prioritizing profit over public good. He initially filed a lawsuit in June 2024 but withdrew it after internal emails surfaced showing his past acknowledgment that the company needed substantial revenue to sustain its AI research. He later refiled the case in August, accusing OpenAI of engaging in racketeering and deviating from its founding values.
In response, OpenAI has claimed that Musk’s actions stem from frustration over his failed 2018 attempt to convince his co-founders to merge OpenAI with Tesla.
Future Implications for AI Leadership
With Musk’s offer rejected, OpenAI continues to chart its own path, expanding its AI capabilities while maintaining strategic partnerships. The decision reaffirms its intent to remain a dominant force in AI research and development without external control.
Meanwhile, Musk’s rivalry with OpenAI is expected to intensify, as his company, xAI, seeks to challenge OpenAI’s leadership in artificial intelligence innovation.
