Elon Musk’s Takeover Bid for OpenAI Rejected: What It Means for AI’s Future

Elon Musk, a co-founder of OpenAI and a leading figure in the tech industry, recently made a high-profile attempt to reclaim control of the artificial intelligence powerhouse. Musk, along with a group of investors, put forward a massive $97.4 billion offer to acquire OpenAI’s nonprofit parent company. However, the bid was swiftly rejected by OpenAI’s board, signaling a new chapter in the ongoing rivalry between Musk and the organization’s leadership.

Musk’s Vision vs. OpenAI’s Current Path

Musk has long expressed dissatisfaction with OpenAI’s shift from its original nonprofit, open-source foundation to its present for-profit model. His attorney, Marc Toberoff, described the takeover offer as an effort to realign OpenAI with its founding goals of transparency and safety, rather than commercial interests. However, OpenAI’s leadership dismissed the offer outright, with attorney William Savitt stating that it was never a serious bid. OpenAI’s chairman, Bret Taylor, further reinforced this stance by declaring that the organization is not for sale.

A Growing Rift Between Musk and OpenAI

The rejection of this takeover bid is part of a broader, longstanding conflict between Musk and OpenAI’s CEO, Sam Altman. Musk was instrumental in founding OpenAI in 2015 as a nonprofit dedicated to artificial intelligence research, but he parted ways with the organization when it transitioned to a for-profit structure. Since then, Musk has been openly critical of OpenAI and even filed a lawsuit against the company, accusing it of abandoning its nonprofit mission. Meanwhile, he has been aggressively building his own AI venture, xAI, positioning it as a direct competitor to OpenAI.

Social Media Clash

The fallout from the rejected bid played out on social media, with Altman and Musk exchanging sharp remarks. Altman, in a playful jab at Musk, posted on X (formerly Twitter), “No thank you, but we will buy Twitter for $9.74 billion if you want.” Musk responded by calling Altman a swindler and mockingly dubbing him “Scam Altman.” This public exchange highlighted how deeply personal the dispute over OpenAI’s future has become, blending professional disagreements with long-standing personal tensions.

Legal and Financial Implications

Unlike standard corporate takeovers, acquiring OpenAI presents unique legal challenges due to its nonprofit origins. According to legal expert Joel Fleming, nonprofit boards are not obligated to maximize value for shareholders, making it easier for OpenAI to dismiss Musk’s bid. Musk’s legal team has attempted to involve regulators in California and Delaware to push OpenAI into a formal bidding process, but Musk has hinted that he may withdraw his offer altogether if OpenAI maintains its current course.

Despite Musk’s efforts, OpenAI continues to solidify its position in the AI industry. SoftBank is reportedly close to investing $40 billion in the company, valuing OpenAI at an estimated $260 billion. Microsoft remains a key partner, further bolstering OpenAI’s dominance in the market. Meanwhile, Musk appears committed to advancing his own AI ambitions through xAI, creating direct competition with his former company.

The Future of AI Competition

With OpenAI refusing to entertain Musk’s acquisition attempt, the rivalry between Musk and Altman is likely to intensify. It remains unclear whether Musk will continue with his lawsuit, push for regulatory intervention, or refocus entirely on his own AI venture. Regardless, OpenAI is securing significant investments and strengthening its commercial partnerships while Musk continues advocating for a more transparent and open AI landscape.

As the competition between OpenAI and xAI heats up, one thing is certain—the battle for control over the future of artificial intelligence is far from over.