OpenAI’s board is preparing to introduce new governance measures that would effectively block hostile takeovers, including Elon Musk’s bid to regain control of the company.
The proposed changes would grant OpenAI’s nonprofit governing entity special voting rights, allowing it to override shareholder decisions in cases where company independence is at risk. If approved, these changes could permanently shut down Musk’s ambitions of reclaiming power over OpenAI.
The decision follows OpenAI’s recent rejection of Musk’s $97.4 billion takeover bid, which the board dismissed as an attempt to pressure the company into negotiations.
OpenAI is also trying to fend off Musk’s lawsuit, which claims that the organization has abandoned its original mission of open AI research in favor of corporate interests. A U.S. judge recently hinted that Musk’s lawsuit will proceed to trial, setting up a high-stakes legal battle that could force him to testify under oath.
New Board Powers Aim to Secure OpenAI’s Future
The board’s proposed governance changes would give OpenAI’s nonprofit entity final authority over leadership decisions, effectively preventing any external investor from forcing a shift in company direction.
This move is seen as a direct response to Musk’s recent takeover attempt and the growing influence of major tech firms in AI development.
According to a a report in the Financial Times, OpenAI’s leadership is weighing whether these governance protections will be enough to maintain its independence amid increasing legal and financial pressures.
The company has faced scrutiny over its transition from a nonprofit research lab to a capped-profit model that allows external investment while maintaining mission control.
Musk has long been critical of OpenAI’s shift toward private funding, arguing that its partnership with Microsoft has turned it into a corporate AI provider rather than an independent research organization.
His lawsuit claims that OpenAI’s licensing agreement with Microsoft contradicts its founding principles and unfairly consolidates AI advancements under one company’s control.
Musk’s Lawsuit Moves to Trial
Musk’s legal battle with OpenAI is escalating. U.S. District Judge Yvonne Gonzalez Rogers recently said that the case will most probably proceed to trial. During a recent court session, she stated: “Something is going to trial in this case.”
The ruling means Musk could be required to testify, putting his past statements about OpenAI’s mission and structure under legal scrutiny.
As part of the case, Musk has expanded his lawsuit to include antitrust claims, alleging that OpenAI’s restructuring unfairly restricts market competition in AI research. OpenAI has dismissed the lawsuit as “a fictional narrative” designed to challenge the company’s leadership.
OpenAI’s attorneys argued that “Musk should be competing in the marketplace rather than the courtroom.” The company maintains that Musk’s legal approach is an attempt to regain influence over an organization he voluntarily left years ago.
Musk’s lawsuit raises concerns about Microsoft’s deep relationship with OpenAI. The tech giant has invested billions into OpenAI and holds exclusive licensing rights to its most advanced AI models. Musk claims this contradicts OpenAI’s original goal of ensuring AI development remains independent of corporate control.
Despite these claims, OpenAI asserts that Microsoft has no direct authority over its operations or research decisions. However, concerns over AI consolidation are growing, particularly as regulatory bodies scrutinize major technology firms’ increasing control over artificial intelligence development.
OpenAI’s Capped-Profit Model and Financial Independence
OpenAI’s leadership argues that its capped-profit model is necessary to fund long-term AI research while preventing investors from exerting excessive influence over its mission. Under this structure, investors can earn returns, but profits beyond a certain cap are reinvested into research rather than distributed to shareholders.
This approach has allowed OpenAI to secure major funding, including the recent $40 billion investment from SoftBank. Such financial backing has been critical in keeping OpenAI competitive against AI rivals while maintaining board control over corporate decisions.
The governance changes being considered by OpenAI could have far-reaching effects on the AI industry. If the board successfully implements special voting rights, it would set a precedent for other AI firms seeking to protect themselves from hostile takeovers.
If OpenAI succeeds in its legal defense and governance restructuring, it may cement a model for balancing corporate investment with research independence. However, if Musk wins in court, OpenAI could face regulatory scrutiny and potential leadership changes.
Meanwhile, Musk has intensified efforts with his own AI venture, xAI, positioning it as a competitor to OpenAI. xAI has just released Grok 3, a major update to its chatbot, which the company claims is “ten times more capable” than the previous version. Benchmarks provided by xAI show Grok 3 outperforms GPT-4o and the currently publicly available reasoning models from OpenAI.
