OpenAI Rejects Elon Musk's $97.4 Billion Takeover Offer for Nonprofit Parent

OpenAI has unanimously rejected Elon Musk's $97.4 billion takeover offer for its nonprofit parent organization, with Chairman Bret Taylor declaring the company is not for sale and attorney William Savitt dismissing the proposal as not a genuine bid. The offer, submitted Monday by Musk's lawyer Marc Toberoff on behalf of an investor group, represents the latest escalation in tensions between Musk and co-founder Sam Altman, who mockingly countered by offering to buy Twitter for $9.74 billion. Musk, who co-founded OpenAI as a nonprofit in 2015 but has since become a bitter adversary, is simultaneously suing to block OpenAI's conversion to a for-profit structure while raising billions for his rival AI startup xAI. The rejection comes as OpenAI pursues major investments, including a near-final $40 billion deal with SoftBank at a $260 billion valuation, though its nonprofit board remains legally beholden to its charter rather than investor returns.

OpenAI's Rejection of Musk's $97.4 Billion Takeover Bid

• ▪The OpenAI board's decision to reject Elon Musk's bid was unanimous
• ▪Marc Toberoff submitted Elon Musk's takeover offer to OpenAI on Monday
• ▪Marc Toberoff disclosed on Monday that Elon Musk was leading a group of investors in offering to buy control of OpenAI for $97.4 billion
• ▪OpenAI officially rejected Elon Musk's proposal to buy OpenAI's nonprofit parent for $97.4 billion
• ▪OpenAI attorney William Savitt sent a letter to Elon Musk's lawyer on Friday rejecting the proposal

Musk and Altman's Deteriorating Relationship

• ▪Sam Altman responded to Elon Musk's takeover offer by offering to buy Twitter for $9.74 billion
• ▪OpenAI was launched as a nonprofit AI research lab in 2015
• ▪Elon Musk and Sam Altman have become bitter adversaries since OpenAI's emergence as the pioneer of generative AI through ChatGPT
• ▪Elon Musk and Sam Altman were two of the founders of OpenAI in 2015
• ▪Elon Musk called Sam Altman a swindler on X in response to Sam Altman's Twitter purchase offer
• ▪Elon Musk called Sam Altman Scam Altman in a reply to a different user on X

OpenAI's Transition from Nonprofit to For-Profit Structure

• ▪Elon Musk has raised billions of dollars for xAI, Elon Musk's AI startup rival to OpenAI
• ▪Marc Toberoff sent a letter to the attorneys general in California and Delaware on January 7 asking that bidding be opened up for OpenAI
• ▪Elon Musk said in a court filing that Elon Musk will withdraw Elon Musk's bid for OpenAI's nonprofit arm if OpenAI stops its conversion into a for-profit entity
• ▪SoftBank is close to finalizing a $40 billion investment in OpenAI at a $260 billion valuation as of February 7

Legal Implications and Nonprofit Board Responsibilities

• ▪Joel Fleming is a securities litigator at Equity Litigation Group

Perspective of Elon Musk

• ▪Elon Musk characterizes Sam Altman's leadership as fraudulent through public statements calling him a swindler

Perspective of OpenAI leadership

• ▪OpenAI dismissed Elon Musk's $97.4 billion proposal as not a genuine bid
• ▪Sam Altman's counteroffer to buy Twitter for $9.74 billion was intended to mock Elon Musk's takeover proposal as unserious

Perspective of Marc Toberoff

• ▪Marc Toberoff's January 7 letter to state attorneys general suggests OpenAI's nonprofit board should consider multiple acquisition offers