*

OpenAi says any potential reorganization will strengthen

its

nonprofit

*

Musk's consortium says it will withdraw bid if OpenAI

remains

nonprofit

*

Musk was an OpenAi co-founder who later left

(Adds statement from Elon Musk lawyer in paragraph 4,

background in paragraph 5)

Feb 14 (Reuters) - OpenAI on Friday rejected a $97.4

billion bid from a consortium led by billionaire Elon Musk for

the ChatGPT maker, saying the startup is not for sale and that

any future bid would be disingenuous.

The unsolicited approach is Musk's latest attempt to block

the startup he co-founded with OpenAI CEO Sam Altman - but later

left - from becoming a for-profit firm, as it looks to secure

more capital and stay ahead in the artificial intelligence race.

"OpenAI is not for sale, and the board has unanimously

rejected Mr. Musk's latest attempt to disrupt his competition.

Any potential reorganization of OpenAI will strengthen our

nonprofit and its mission to ensure AGI benefits all of

humanity," it said on X, quoting OpenAI Chairman Bret Taylor on

behalf of the board.

Musk's lawyer Marc Toberoff, in a statement, responded that

OpenAI is putting control of the for-profit enterprise up for

sale, and said the move will "enrich its certain board members

rather than the charity."

OpenAi in late December had outlined plans to

revamp its structure,

saying it would create a public benefit corporation to make

it easier to "raise more capital than we'd imagined," and remove

the restrictions imposed on the startup by its current nonprofit

parent.

Altman on Monday had rebuffed the consortium's offer with a

"no thank you" posted on X, prompting Musk to retort:

"swindler." On Tuesday, Altman told news website Axios that

OpenAI was not for sale.

Musk's lawyers, in a court filing on Wednesday, said the

consortium, which includes Musk's own AI startup xAI, would

withdraw its bid for OpenAI's non-profit arm if it drops plans

to become a for-profit entity.

"Two days ago, you filed a pleading in court adding new

material conditions to the proposal. As a result of that filing,

it is now apparent that your clients' much publicized 'bid' is

in fact not a bid at all," the OpenAI board said, according to a

letter signed by William Savitt, a lawyer representing the

company, and sent to Toberoff on Friday.

Other investors in the consortium include Valor Equity

Partners, Baron Capital and Hollywood power broker Ari Emanuel.

Altman and Musk have been at loggerheads for years.

After Musk's departure in 2019, OpenAI created a for-profit

arm that has drawn billions of dollars in funding, sparking

allegations from Musk that the startup breached its original

mission by putting profit ahead of the larger public good.

Musk sued Altman, OpenAI and its biggest backer, Microsoft ( MSFT )

, in August last year for alleged breach of contract.

In November, Musk asked a federal court for a preliminary

injunction to block OpenAI from moving to a for-profit

structure.