OpenAI has formally rejected Elon Musk's attempt to buy the nonprofit that effectively governs the company, sharpening a fight over control, mission, and corporate structure at one of the most closely watched organizations in AI.
The company said on Friday that its board of directors had “unanimously” rejected the offer. The decision follows a $97.4 billion bid from Musk, his AI company, xAI, and a group of investors.
The bid and the rejection
OpenAI framed the proposal as unwanted and inconsistent with its mission. Bret Taylor, OpenAI's board chair, said in a statement shared via OpenAI's press account on X that the board saw the bid as “an attempt to disrupt his competition.”
“OpenAI is not for sale, and the board has unanimously rejected Mr. Musk's latest attempt to disrupt his competition,” Taylor said. “Any potential reorganization of OpenAI will strengthen our nonprofit and its mission to ensure [artificial general intelligence] benefits all of humanity.”
The New York Times reported that OpenAI also sent a letter to Musk’s lawyer, Marc Toberoff, saying the bid was “not in the best interests of [OpenAI's] mission.”
The offer arrived on Monday. OpenAI CEO Sam Altman and the company’s board quickly dismissed the unsolicited proposal, though not formally at first. Andy Nussbaum, counsel representing OpenAI’s board, later said in a statement that Musk’s bid “doesn’t set a value for [OpenAI’s] nonprofit” and that the nonprofit is “not for sale.”
Why the nonprofit matters
The dispute centers on the nonprofit that sits above OpenAI’s business structure. OpenAI was founded as a nonprofit before it transitioned to a “capped-profit” structure in 2019.
Under that structure, the nonprofit is the sole controlling shareholder of the capped-profit OpenAI corporation. The company also retains formal fiduciary responsibility to the nonprofit’s charter.
That arrangement is now under pressure because OpenAI is in the process of restructuring again. The current plan is to move to a traditional for-profit company, specifically a public benefit corporation.
For OpenAI, the board’s message is that any reorganization would support the nonprofit and its mission. For Musk, the planned conversion is part of the broader legal and strategic dispute now surrounding the company.
Musk’s legal challenge
Musk, an OpenAI co-founder, brought a lawsuit against the company and Altman last year. The suit alleges that OpenAI engaged in anticompetitive behavior and fraud, among other offenses.
Through that lawsuit, Musk is seeking to enjoin OpenAI’s conversion to a for-profit. His bid for the nonprofit is therefore not only a financial proposal, but also part of a larger conflict over what OpenAI is and who should control its direction.
In a court filing on Wednesday, lawyers for Musk said he will withdraw his bid if OpenAI’s board “preserve[s] the charity’s mission” and halts the conversion to a for-profit.
OpenAI’s attorneys pushed back in a filing earlier the same day. They called Musk’s move to take control of the company “an improper bid to undermine a competitor,” and said it contradicted his position in court that a transfer of the startup’s assets through restructuring would breach its mission as a charitable trust.
The public fight around OpenAI
The bid has also triggered a public clash between Musk’s allies and Altman. The arguments are not limited to legal filings or board statements; they have played out through interviews and public remarks as well.
In a podcast interview on Thursday, Ari Emanuel, one of the backers of Musk’s offer for the OpenAI nonprofit, called Altman a “phony” who is “trying to get away with cheating the charity and its original mission.”
Altman has characterized Musk’s bid as “an attempt to slow [OpenAI] down.” He also quipped that Musk’s life is “from a position of insecurity.”
Those exchanges underline how the OpenAI board rejection is not a routine corporate response to an unsolicited bid. It sits at the intersection of competition in AI, a contested restructuring, and a disagreement over how the company’s original mission should be protected.
What happens next
Based on OpenAI’s statements, the board’s position is clear: the nonprofit is not for sale. The company is also presenting the planned reorganization as a way to strengthen the nonprofit and its mission, rather than weaken it.
Musk’s side has tied the offer to OpenAI stopping its conversion to a for-profit. That makes the next stage of the dispute likely to revolve around both the bid and the restructuring process.
For now, the main facts are straightforward. OpenAI says its board unanimously rejected Musk’s $97.4 billion offer. Musk is challenging the company’s direction in court. And the future structure of OpenAI remains at the center of the fight.