OpenAI’s board has yet to receive a formal acquisition offer from Elon Musk

OpenAI’s board has not yet received a formal offer to buy the company from a consortium led by Elon Musk, Reuters reports. However, the businessman’s lawyer said such a document was sent to OpenAI’s outside counsel.

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Musk has floated an offer to buy the nonprofit that controls ChatGPT developer OpenAI for $97.4 billion. A day after the deal was announced, the parties to the proposed deal are in disagreement about what exactly happened to the formal offer. OpenAI’s board has not received a formal offer from Musk’s group, a person familiar with the matter told Reuters, adding to the confusion surrounding the bid to take control of the world’s most famous artificial intelligence company.

Musk’s lawyer Marc Toberoff told Reuters that he emailed the proposal to OpenAI’s outside counsel at Wachtell, Lipton, Rosen & Katz on Monday, though the firm declined to comment. Attached to the email, Mr. Toberoff said, was a document — a “detailed four-page letter of intent” signed by Musk and other investors — addressed to OpenAI’s board. The nonprofit that runs OpenAI is not for sale, CEO Sam Altman told Reuters the day before. He sent an internal memo to his staff saying that while the board had not formally considered the proposal, he intended to reject it based on OpenAI’s mission.

Musk co-founded OpenAI as a nonprofit in 2015 with Altman, but left before the company took off amid disagreements over its direction and funding. He launched a rival AI startup, xAI, in 2023. OpenAI is now looking to restructure itself, become a for-profit company, and raise $40 billion in funding to provide the capital it needs to develop cutting-edge AI models; at that point, it needs to put a price on the nonprofit that oversees the for-profit arm.

Kathleen Jennings, the attorney general of Delaware, where OpenAI is based, has promised to review the company’s reorganization scheme to ensure that it “aligns its direct charitable purposes with the public benefit and not with the commercial or private interests of OpenAI’s directors or partners.” Musk’s proposal, lawyers argue, makes it difficult to fairly value OpenAI, particularly with respect to its nonprofit assets, in the complex process of corporate reorganization—setting the price to be paid in exchange for moving the company out of nonprofit control.