OpenAI weighs special voting rights to guard against hostile takeovers, FT reports

OpenAI is exploring the possibility of giving unique voting privileges to its non-profit board to maintain its directors’ authority, as the ChatGPT creator resists an unsolicited acquisition offer from Elon Musk, the Financial Times reported on Tuesday.

According to the report, Chief Executive Officer Sam Altman along with board members are assessing new governance strategies as the company shifts to a conventional for-profit model, based on information from individuals familiar with the talks.

Although no definitive decisions have been reached, this action might assist OpenAI in preventing future hostile takeover bids, including those from Musk, who was a co-founder alongside Altman but eventually left the company.

On Friday, OpenAI turned down a $97.4 billion buyout proposal from a group headed by Musk, stating that the startup is not for sale and deeming any potential future offers as insincere.

Musk’s proposal represents his most recent attempt to stop OpenAI from transforming into a profit-oriented organization as it pursues additional funding to remain competitive in the AI competition. Should they be put into effect, the special voting rights would enable the non-profit board to override key investors, such as supporters like Microsoft (MSFT.O) and SoftBank (9984.T), preserving its decision-making authority, according to the report.