OpenAI’s board of directors has unanimously rejected an offer led by Elon Musk to acquire the artificial intelligence company for R1,814.88.4 billion. The board chairman, Bret Taylor, stated that OpenAI is not for sale and emphasized the company’s commitment to its nonprofit mission. Musk had filed court documents stating that he would withdraw the offer if OpenAI returned to a nonprofit “charity” model. The tensions between Musk and OpenAI arose due to differences regarding the company’s corporate structure and its transition to a for-profit model. Musk, along with Sam Altman, was among the founders of OpenAI in 2015 but later departed to focus on his own AI company, xAI.
OpenAI’s pursuit of a new corporate structure aims to attract investors and provide more stable governance. The transition requires approval from authorities in California and Delaware. Musk’s bid appears to disrupt OpenAI’s fundraising efforts, with the company’s Chief Global Affairs Officer suggesting that the offer came from a struggling competitor in the marketplace.
OpenAI’s board of directors has unanimously rejected an offer led by Elon Musk to acquire the artificial intelligence company for R1,814.88.4 billion. In a statement posted by the company on Musk-owned X (formerly Twitter), the board chairman, Bret Taylor, made it clear that OpenAI is not for sale and that Musk’s latest attempt to disrupt the competition has been rejected. The board believes that any potential reorganization of OpenAI will strengthen the nonprofit and its mission to ensure that artificial general intelligence (AGI) benefits all of humanity.
The tensions between Musk and OpenAI stem from differences regarding the company’s corporate structure. OpenAI currently operates as a hybrid organization, with a nonprofit arm and a money-making subsidiary. However, the transition to a for-profit model, which Sam Altman, the CEO of OpenAI, considers crucial for the company’s development, has exacerbated the ongoing tensions with Musk.
Elon Musk and Sam Altman were part of the founding team of OpenAI in 2015, with Musk providing initial funding of R841.96 million. Musk later departed the company, citing a potential conflict with his involvement in Tesla, which was becoming more focused on AI. Musk went on to establish his own AI company called xAI in early 2023.
The transition to a traditional for-profit company requires approval from authorities in California and Delaware. These authorities will scrutinize how the nonprofit arm of OpenAI is valued when it becomes a shareholder in the new company. Current investors prefer a lower valuation to maximize their share of the new company.
Musk’s bid, valuing the OpenAI nonprofit at R1,814.88.4 billion, appears to be an attempt to disrupt the company’s ongoing fundraising efforts. OpenAI’s Chief Global Affairs Officer, Chris Lehane, has characterized Musk’s offer as coming from a competitor who has struggled to keep up with the technology and compete in the marketplace.
As the situation unfolds, OpenAI remains steadfast in its commitment to its nonprofit mission and its pursuit of a corporate structure that will attract investors and provide stable governance.
