OpenAI Rejected a 2018 Takeover Offer from Elon Musk: Report

OpenAI has been making massive waves in the tech space these last few months since the launch of its wildly popular AI chatbot, ChatGPT. However, well before OpenAI’s newfound prominence, Tesla and Twitter CEO Elon Musk wanted to take control of the company — reports Semafor.

Musk was one of OpenAI’s original founders, who together donated $1 billion USD to the company for startup money in 2015. However, people with knowledge of the matter told Semafor that by 2018, Musk believed OpenAI was falling vastly behind Google in its AI ambitions and, to remedy that, tabled a proposal to take over and run the company.

Musk’s offer was rejected by his fellow co-founders, including now-CEO Sam Altman and Greg Brockman, a co-founder who was serving as chief technology officer at the time.

According to sources, what followed was a power struggle at the company. Altman, who was one of OpenAI’s directors back then, stepped up to take control as the firm’s president, and the internal conflict ultimately concluded with Musk stepping down from OpenAI’s board of directors and cutting ties with the company.

Musk’s departure from OpenAI was publicly (and internally) sold as a conflict of interest. Tesla was developing its own AI-powered autonomous driving software, putting the two companies in competition for talent. After all, the Musk-led electric automaker had previously poached one of OpenAI’s brightest, Andrej Karpathy, to lead its autonomous driving efforts.

The breakup was less than amicable, though, per sources. Following his exit, Musk apparently reneged on prior commitments to making a massive donation to OpenAI. The celebrity billionaire had originally pledged $1 billion to OpenAI over the course of several years and had already donated $100 million, but the payments stopped after he walked away from the company, said sources.

While Musk pulling his funding initially left OpenAI unable to pay the bills, the company went on to form a for-profit entity in 2019 and received $1 billion in funding from Microsoft, among other investments.

Today, OpenAI is one of the hottest companies in the world and ChatGPT has sparked an AI race of unprecedented proportions. Back in January, Microsoft invested an additional $10 billion in the company.

Last week, OpenAI unveiled GPT-4, the latest iteration of the large language model that powers ChatGPT.

To learn more about what went down between OpenAI and Musk, head over to Semafor.

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