The board of OpenAI has unanimously turned down a $97.4 billion takeover offer from tech billionaire Elon Musk, intensifying the legal battle over the artificial intelligence company’s transition from a nonprofit to a for-profit entity.
In a statement issued on Friday, OpenAI board chair Bret Taylor declared, “OpenAI is not for sale, and the board has unanimously rejected Mr. Musk's latest attempt to disrupt his competition.”
The rejection follows Musk’s legal action against OpenAI, a company he had co-founded as a nonprofit nearly a decade ago. The Tesla and SpaceX chief has accused the firm of deviating from its original mission and violating its foundational agreements.
Legal dispute deepens
Musk, who had invested around $45 million in OpenAI before parting ways in 2018, has been engaged in a protracted legal battle with the company.
The lawsuit alleges that OpenAI has strayed from its commitment to operate as a nonprofit entity and that its commercial ties with Microsoft unfairly restrict competition.
Also read: Musk makes $97.4 billion bid to acquire OpenAI
Amid ongoing litigation, Musk, along with his AI venture xAI and a consortium of investors, announced a bid on Monday to acquire OpenAI’s nonprofit parent organisation, which controls the for-profit subsidiary.
The proposal, later elaborated upon in a court filing, sought control over OpenAI’s commercial arm.
However, OpenAI’s legal representative, William Savitt, dismissed Musk’s offer outright. In a letter to Musk’s legal team on Friday, Savitt stated, “The proposal is not in the best interests of OAI’s mission and is rejected.”
Savitt further argued that Musk’s latest court filing introduced “new material conditions” that rendered his offer unviable.
“As a result of that filing, it is now apparent that your clients' much-publicised ‘bid’ is in fact not a bid at all,” he asserted.
Tensions with microsoft
Musk’s legal battle with OpenAI escalated last year when he expanded his lawsuit to include Microsoft, OpenAI’s strategic business partner.
The billionaire has sought judicial intervention to halt OpenAI’s transition into a for-profit venture and prevent its deepening collaboration with the tech giant.
The court is yet to rule on Musk’s request, though the presiding judge has reportedly expressed scepticism over certain aspects of his claims.
With the board’s latest decision, OpenAI has made it unequivocally clear that it has no intention of ceding control to Musk.
Also read: Is AI making us dumber? Research says it might be
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