OpenAI has officially rejected Elon Musk’s proposal to buy the company for $97.4 billion, according to a letter sent to Musk’s lawyer on Friday. The billionaire’s attorney had initially revealed that Musk was leading a group of investors in offering to buy control of OpenAI, but the nonprofit startup’s board determined that the proposal is not in its best interest.
OpenAI Chairman Bret Taylor stated that the company “is not for sale,” and any potential reorganization will strengthen its mission to ensure artificial general intelligence benefits all humanity. The decision comes after Musk had previously disclosed his bid, which was made through a group of investors.
The rejection may be complicated due to OpenAI’s nonprofit status, as it doesn’t have fiduciary responsibility to investors. However, Joel Fleming, a securities litigator, noted that boards in for-profit corporations typically don’t face legal exposure for rejecting takeover offers, and the same principle applies to non-profits with less reason to maximize shareholder value.
OpenAI has been trying to convert into a for-profit entity to take advantage of commercial demand for its technology. Microsoft has invested billions, while SoftBank is close to finalizing a $40 billion investment at a $260 billion valuation. Musk had previously sued OpenAI over contract breach and attempted to thwart its transition to a for-profit structure.
Source: https://www.cnbc.com/2025/02/14/openai-rejects-musks-takeover-offer-says-it-wasnt-a-bid-at-all.html