OpenAI's board unanimously rejects Elon Musk's $97.4B acquisition bid
What's the story
The board of OpenAI, the leading artificial intelligence (AI) company, has unanimously rejected a $97.4 billion acquisition offer from tech entrepreneur Elon Musk. Bret Taylor, the chairperson of the firm's board, announced that "OpenAI is not for sale." He further clarified that the board has unanimously dismissed Musk's latest attempt to disrupt his competition.
Legal stance
OpenAI's legal counsel clarifies rejection of Musk's proposal
OpenAI's legal counsel, William Savitt, conveyed the board's decision to Musk's attorney. In his letter, Savitt wrote that the proposal "is not in the best interests of OAI's mission and is rejected." This comes as Musk and OpenAI continue to engage in legal battles, with the former accusing the AI company of straying from its founding principles as a nonprofit.
Ongoing dispute
Musk's legal battle and acquisition attempt
Musk, an early investor in OpenAI, launched a legal battle against the company nearly a year ago. He accused OpenAI of violating its contract by deviating from its nonprofit roots. Despite the accusations, the firm continues to capitalize on the commercial success of generative AI while being a nonprofit organization, dedicated to building better AI for the benefit of humanity.
Strategic shift
OpenAI's transition and Musk's countermove
OpenAI is now moving toward becoming a for-profit company. In a bid to counter this move, Musk, his AI start-up xAI, and a few investment companies offered to buy the nonprofit that controls OpenAI. Musk further detailed this proposal in a court filing on Wednesday.
Rejection details
Rejecting Musk's proposal amid legal dispute
Savitt, in his letter to Musk's attorney, said that the court filing added "new material conditions to the proposal." He further explained that because of these new conditions, it was evident that the much-publicized 'bid' was not a bid at all. Despite this clarification, he confirmed that the board had unanimously rejected it even as originally presented.
Upcoming developments
OpenAI's future plans and funding prospects
Notably, the rejection of Musk's offer comes as OpenAI continues to negotiate with SoftBank Group for a new round of funding at a possible $300 billion valuation. As part of its planned corporate restructuring, OpenAI also plans to pay its nonprofit parent with equity in its for-profit subsidiary. This could have a major impact on the AI industry's landscape.