OpenAI hasn’t received a formal takeover bid from Musk

OpenAI’s board has yet to receive a formal offer from a consortium led by Elon Musk, although the billionaire’s lawyer said the offer was sent to OpenAI’s outside counsel. A day after Musk unveiled a $97.4 billion offer to buy the nonprofit that controls ChatGPT maker OpenAI, the parties were still at odds over what exactly happened with the formal offer, reported by the Reuters.

OpenAI’s board has yet to receive a formal bid from Musk’s group, adding to the confusion over the unsolicited bid to take control of the world’s most famous AI company. Musk’s lawyer, Mark Toberoff, told Reuters that he emailed the offer on Monday to OpenAI’s outside counsel at Wachtell, Lipton, Rosen & Katz. The offer, attached to the email, took the form of a “detailed four-page letter of intent” to acquire OpenAI’s assets, signed by Musk and other investors and addressed to the board, Toberoff said.

OpenAI not for sale to Musk

The nonprofit that controls OpenAI is not for sale, Altman said when asked about Musk’s offer to buy it. The offer from the Musk-led consortium comes amid the billionaire’s fight to block the startup’s transition from artificial intelligence to a commercial company. “I have nothing to say. I mean, it’s ridiculous,” Altman said on the sidelines of an artificial intelligence summit in Paris when asked about the offer.

“The company is not for sale. This is another tactic of his to try to get to us,” Altman said, referring to Musk. In an internal memo to OpenAI employees on Monday, Altman said the board, while not formally considering the proposal, plans to reject it in the interest of OpenAI’s mission. Musk founded OpenAI as a nonprofit with Altman in 2015 but left before the company was even operational due to disagreements over the company’s direction and funding sources with Altman and other co-founders.

OpenAI and xAI

In 2023, Musk launched a rival artificial intelligence startup, xAI. Musk, the CEO of Tesla and owner of the technology company X, is a close ally of U.S. President Donald Trump. He heads the Office of Government Efficiency, a new White House department tasked with radically reducing the federal bureaucracy. OpenAI, in the process of raising $40 billion, is also seeking to transform itself from a nonprofit to a for-profit organization, which it says is needed to secure the capital needed to develop the best AI models.

The complex transition involves setting a price for OpenAI’s nonprofit control over the for-profit unit. Legal experts said Musk’s request complicates the fair value of OpenAI, especially for the charitable assets in a complex corporate conversion, meaning the price he must pay in exchange for the nonprofit giving up control.