OpenAI's board of directors has officially rejected Elon Musk's nearly $100 billion offer for the company that created ChatGPT, the world's most well-known artificial intelligence (AI) tool.
However, experts say the unsolicited bid might not be a complete failure for Musk.
This is because the offer could still disrupt CEO Sam Altman's plans to change OpenAI from a non-profit entity to a for-profit company.
"Musk is basically trying to hinder OpenAI's growth path," said Johnnie Penn, an associate teaching professor at the University of Cambridge, in an interview with the BBC.
Last week, Musk and a group of investors, including Hollywood superagent Ari Emanuel, made a $97.4 billion (£78.4 billion) offer for all of OpenAI's assets.
It was a huge amount, but less than the $157 billion the firm was valued at during a funding round just four months ago, and much lower than the $300 billion some believe it is worth now.
Adding to the complexity is OpenAI's unique structure, which involves a partnership between non-profit and for-profit divisions.
Mr. Altman reportedly wants to change this by removing the non-profit board.
This change involves costs that Mr. Musk seems to be trying to increase.
"Musk is trying to raise the perceived value of OpenAI's non-profit arm, so OpenAI has to pay more to fulfill its obligations to its own non-profit," said Dr. Penn.
The value of its non-profit assets isn't clear. With his bid, Musk was suggesting a price, according to Cornell University senior lecturer Lutz Finger, who is also the founder and CEO of AI startup R2Decide.
"By putting a price on the non-profit part, Musk makes the split much more expensive for Altman," Mr. Finger said. "It's very simple."
'Missed the AI Train'
Mr. Musk explained his actions by saying he wants to bring OpenAI— which he co-founded—back to its non-profit roots and original mission of developing AI for the benefit of humanity.
However, some suggest he might have less noble motives related to his own AI company, xAI, and chatbot Grok, which have not been well-received by the public.
"Musk has somewhat missed the AI train. He's behind and has made several attempts to catch up," Mr. Finger said.
Now, Mr. Finger says, Mr. Musk is trying to undermine his toughest competitor.
The already tense relationship seemed to worsen last week when Mr. Altman mocked Mr. Musk's offer on X, and Mr. Musk responded by calling his former partner a "swindler."
Mr. Altman then retaliated in an interview with Bloomberg, saying that Mr. Musk is not "a happy person" and that his decisions come from a "position of insecurity." This back-and-forth is also happening in court, where U.S. District Judge Yvonne Gonzalez Rogers is considering Mr. Musk's request for an injunction to block OpenAI's planned conversion.
He claims that he will suffer irreparable harm without her intervention.
"It is plausible that what Mr. Musk is saying is true. We'll find out. He'll testify," Gonzalez Rogers said during a hearing in Musk v. Altman earlier this month in Oakland, California.
According to OpenAI's lawyers, Mr. Musk's recent bid contradicts his earlier claims that OpenAI's assets cannot be transferred for "private gain."
"Out of court, those constraints evidently do not apply, as long as Musk and his allies are the buyers," their reply brief states.
Some observers say making a deal was never his goal.
"I think he's just trying to create noise, news, and confusion," says Karl Freund, founder and principal analyst at Cambrian-AI.
But besides causing problems for his old rival, that strategy could harm Mr. Musk's own reputation.
"He's brilliant. He creates incredible companies that do amazing things. But his personal agenda is causing people to question his motives," Mr. Freund said.