OpenAI Formally Rejects Buyout Offer

OpenAI today formally rejected an unsolicited offer by a group of investors led to Elon Musk to acquire it for $97.4 billion.

“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. “Respectfully, it is not up to a competitor to decide what is in the best interests of OpenAI’s mission,” OpenAI counsel Andrew Nussbaum added.

OpenAI also sent a letter to an attorney representing the investor group that issued the acquisition offer.

“Earlier this week, you sent a letter on behalf of a consortium of corporate and financial entities offering to acquire all the assets of OpenAI, Inc. (‘OAI’), and to do so imminently, subject to numerous conditions,” the letter notes. “Two days ago, you filed a pleading in court adding new material conditions to the proposal. As a result of that filing, it is now apparent that your clients’ much-publicized ‘bid’ is in fact not a bid at all. 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 OAI board on this matter is unanimous.”

Elon Musk and a cabal of investors announced their suspect bid for OpenAI on Monday, but it was quickly discovered to be an anticompetitive act aimed at disrupting OpenAI’s business expansion. The AI startup could be valued as high as $300 billion in a coming funding round.

OpenAI is structured as a non-profit with a for-profit subsidiary, but the company plans to restructure as a public benefit company (PBC), a for-profit corporation designed to do good for the public and social good. Doing so will help it raise funds to continue its dramatic expansion and, it hopes, its stunning AI advances. OpenAI is legally required to financially compensate its current non-profit corporate parent for the shift, and it plans to do so by giving it shares in the new PBC it is creating.

“Our plan would result in one of the best resourced non-profits in history,” OpenAI said when it announced this plan in late 2024. “The PBC will run and control OpenAI’s operations and business, while the non-profit will hire a leadership team and staff to pursue charitable initiatives in sectors such as health care, education, and science.”

“Any potential reorganization of OpenAI will strengthen our nonprofit and its mission to ensure AGI [artificial general intelligence] benefits all of humanity,” Mr. Taylor said today.