OpenAI Rejects Elon Musk’s $97.4 Billion Buyout Offer

AFP

Islamabad: OpenAI’s board has unanimously rejected an acquisition bid led by Elon Musk, which valued the company at $97.4 billion. Board Chairman Bret Taylor confirmed the decision in a statement posted on Musk-owned platform X, formerly known as Twitter.

“OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition,” Taylor stated. He further emphasized that any restructuring of OpenAI would aim to strengthen its nonprofit mission to ensure that artificial general intelligence (AGI) benefits all of humanity.

Musk, who co-founded OpenAI in 2015 and contributed $45 million in initial funding, had filed court documents earlier in the week indicating that he would withdraw the offer if the company reverted to a non-profit model. OpenAI currently operates under a hybrid structure, combining a nonprofit entity with a profit-driven subsidiary.

The transition to a for-profit model, seen as essential by OpenAI CEO Sam Altman to sustain the company’s growth, has been a point of contention. Musk left OpenAI in 2018 due to potential conflicts with Tesla’s increasing focus on artificial intelligence. Since then, he has launched his own AI company, xAI, to compete in the rapidly evolving sector.

The high costs associated with developing AI technologies have prompted OpenAI to restructure its corporate framework, allowing investors to hold equity and ensuring financial stability. The move requires approval from regulatory authorities in California and Delaware, who will assess how the nonprofit arm of OpenAI is valued in the transition.

Musk’s bid valued OpenAI’s nonprofit arm at $97.4 billion—reportedly $30 billion higher than figures discussed in ongoing negotiations. Analysts believe the offer was designed to disrupt OpenAI’s fundraising efforts.

Chris Lehane, OpenAI’s Chief Global Affairs Officer, dismissed Musk’s bid, attributing it to competitive challenges. “This offer came from a competitor who has struggled to keep up with the technology and compete with us in the marketplace,” Lehane stated.

OpenAI remains committed to its hybrid structure as it navigates the evolving AI landscape and secures its future development.