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

Feb 14, 2025

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.