This development follows Musk and a group of investors, which includes his AI venture, xAI, submitting an unsolicited offer to purchase OpenAI for $97.4 billion earlier this week, as initially reported by The Wall Street Journal.
Bret Taylor, Chairperson of OpenAI, characterized Musk's proposal as an "attempt to disrupt his competition," emphasizing in a board statement that "OpenAI is not for sale."
He further stated, "Any potential reorganization of OpenAI will enhance our nonprofit and its mission to ensure that AGI benefits all of humanity."
OpenAI CEO Sam Altman had previously informally rejected the offer, responding with a simple "no thank you" on Musk's social media platform, X, and humorously countering with an offer to purchase X for "9.74 billion if you want."
This bid arrives as OpenAI is undergoing significant changes to its business model. Founded in 2015 as a nonprofit, OpenAI transitioned to a hybrid model in 2019, which includes both a nonprofit and a for-profit subsidiary. Currently, it is in the process of converting its for-profit division into a Delaware Public Benefit Corporation, a specific corporate structure that requires balancing profit generation for shareholders with public benefit.
Musk, one of OpenAI's initial investors, has been a vocal critic of the organization's current trajectory. In March 2023, he initiated a lawsuit against OpenAI and Altman, claiming a breach of contract related to their shift to a for-profit model. His legal team has since expanded the allegations to include "racketeering activity" and false advertising, ultimately involving Microsoft, OpenAI's largest investor, in the case.
In a recent court document released earlier this week, Musk's legal representatives indicated a willingness to withdraw their unsolicited takeover bid if OpenAI agreed to maintain the charity's mission and commit to removing the "for sale" sign from its assets by ceasing its conversion efforts.
In addition to the legal developments, Musk is increasingly positioning himself as a direct rival to OpenAI. His AI venture, xAI, which is responsible for X's Grok chatbot, intends to enhance its Colossus supercomputer in Memphis, Tennessee, expanding it to one million GPUs. Furthermore, Bloomberg has reported that xAI is seeking investors for an additional funding round, which would elevate its total funding to $22.4 billion.
Some investors believe Musk's $97.4 billion offer may undervalue OpenAI, given its current standing. The Wall Street Journal noted last month that OpenAI was engaged in discussions regarding a funding round that could value the company at up to $340 billion, more than three times Musk's proposed amount.