San Francisco: OpenAI has announced that its board of directors has unanimously rejected Elon Musk's USD 97.4 billion proposal to take over the company.
"OpenAI is not for sale, and the board has unanimously rejected Mr. Musk's latest attempt to disrupt his competition," said Bret Taylor, chair of OpenAI's board, in a statement on Friday.
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In a letter to Musk's attorney on Friday, OpenAI lawyer William Savitt explained that the takeover proposal "is not in the best interests of OAI's mission and is rejected."
Musk’s legal dispute with OpenAI
Musk, an early investor in OpenAI, has been involved in a legal battle with the company for nearly a year. He claims the organisation has breached its founding mission as a non-profit, which he helped establish a decade ago. This dispute escalated when Musk sued OpenAI for what he considers a betrayal of the company’s original aims.
Earlier this week, while the court case was still pending, Musk, along with his AI startup xAI and several investment firms, announced their intention to buy the nonprofit entity that controls OpenAI. On Wednesday, Musk further detailed the proposal in a court filing, including plans to acquire the controlling stake of the for-profit subsidiary of OpenAI.
OpenAI’s response to Musk’s filing
Savitt’s letter from Friday also pointed out that Musk’s recent filing introduced “new material conditions to the proposal.” He added, "As a result of that filing, it is now apparent that your clients' much-publicised bid is in fact not a bid at all." Despite this, Savitt confirmed that, even in its initial form, the board had unanimously rejected Musk’s offer.
Musk's ongoing lawsuit accuses OpenAI of violating the terms of his early contributions to the company. According to Musk’s lawyer, the billionaire invested around USD 45 million in the startup from its founding until 2018.
Further legal actions and allegations
The legal dispute took a new turn late last year when Musk added fresh claims and defendants to the case. These included OpenAI's business partner, Microsoft, and a request for a court order to stop OpenAI's plan to transform more fully into a for-profit entity. Musk also added xAI as a plaintiff, accusing OpenAI of unfairly stifling business competition.
A judge is still reviewing Musk’s request but expressed doubt about some of his claims during a court hearing last week.
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Published: 15 Feb 2025, 07:46 am IST
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