OpenAI board considers super-voting power to block Elon Musk
OpenAI is weighing special voting rights for its nonprofit board to fend off hostile takeover bids, including Elon Musk's recent $97.4 billion offer. The mechanism would let the board overrule major backers like Microsoft and SoftBank once it converts into a for-profit company. Why it matters: OpenAI wants to tap commercial capital without ever handing over the wheel.
Elon Musk tried to buy OpenAI for $97.4 billion last week, and while the board laughed it off, Sam Altman is already preparing for the next assault.
According to the Financial Times, OpenAI is weighing plans to grant special super-voting rights to its nonprofit board to fend off hostile takeover attempts from Musk and other outsiders.
Building a poison pill
Sources told the FT that Altman and fellow board members are exploring new governance structures as OpenAI converts into a conventional for-profit business.
Under the proposed plan, the nonprofit board would get outsized voting power. That would let it keep ultimate control over the restructured entity and overrule deep-pocketed backers like Microsoft and SoftBank whenever it sees fit.
No final decision has been made, but the mechanism would effectively lock out unsolicited bids.
Altman already flatly rejected Musk's $97.4 billion offer last week, calling Musk a beaten competitor who ignores OpenAI’s mission, before snarking on X that OpenAI would buy Twitter back for $9.74 billion.
Why it matters
OpenAI wants to have its cake and eat it too. It needs to become a standard for-profit company to keep raising astronomical sums of cash, but it still wants the nonprofit shield to kill hostile takeovers.
We think the move is a clever defensive play against Musk’s wallet, but it comes with real risks. Giving a nonprofit board the power to overrule everyone might make big investors like Microsoft and SoftBank deeply uncomfortable about who is actually running the show.
Sources (1)
- arstechnica.com(opens in a new tab)Originalarstechnica.com