OpenAI board rejects Musk $97 billion takeover offer

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OpenAI rejects takeover offer

Musk’s Takeover Attempt and Board’s Response

Musk, who co-founded OpenAI in 2015 but later launched a competing AI startup, assembled a group of investors, including Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, 8VC, and Ari Emanuel’s investment fund, to finance the acquisition.

Musk framed the bid as an effort to restore OpenAI’s founding vision of an open-source, safety-first AI enterprise. However, OpenAI CEO Sam Altman rejected the offer outright, describing it as a competitor’s tactic to "slow us down."

Legal counsel for OpenAI’s board, Andrew Nussbaum, echoed this sentiment, emphasizing that the board's sole fiduciary duty is to ensure that OpenAI advances artificial general intelligence (AGI) for the benefit of humanity. “Respectfully, it is not up to a competitor to decide what is in the best interests of OpenAI’s mission,” Nussbaum stated.

Legal and Financial Ramifications

Musk’s bid comes amid ongoing legal disputes between him and OpenAI. The billionaire has filed two lawsuits accusing OpenAI of abandoning its nonprofit principles in favor of a for-profit model, and he sought to block the company’s restructuring plans.

Following OpenAI’s rejection of Musk’s offer, the company argued in court filings that his bid contradicted his own legal claims—specifically, that OpenAI’s assets should not be transferred for private gain. Musk’s legal team countered by stating he would withdraw the offer if OpenAI agreed to halt its transition into a more conventional for-profit structure.

At the same time, OpenAI is reportedly in discussions with SoftBank Group Corp. regarding a new funding round that could value the company at up to $300 billion. Legal experts suggest that Musk’s bid may pressure OpenAI to justify how it values its nonprofit assets, potentially impacting the equity stakes of current and future investors.

While OpenAI has firmly dismissed Musk’s bid, the offer is likely to intensify scrutiny over its restructuring process. If OpenAI assigns a higher valuation to its nonprofit assets, it could dilute investor equity. As the company navigates legal and financial challenges, regulators and stakeholders will be watching closely to see how OpenAI’s nonprofit mission aligns with its commercial ambitions.

As we wrote, Elon Musk is demanding the impeachment of New York federal judge Paul Engelmayer after the judge issued a February 8 ruling restricting Musk’s Department of Government Efficiency (DOGE) from accessing critical financial records and payment systems within the U.S. Treasury Department.

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