As OpenAI CEO Sam Altman tangles with Elon Musk, there’s one person on OpenAI’s nonprofit board who may have some hard-earned lessons to impart. That would be Bret Taylor, the longtime tech exec who was chairman of Twitter’s board when Musk made his hostile bid for the company in early 2022.
Taylor has a storied history in U.S. tech—he’s the cocreator of Google Maps, the onetime leader of the team that invented Facebook’s “like” button, a former co-CEO of Salesforce and now the cofounder of AI agent outfit Sierra. But it was in his capacity as a board member that the soft-spoken Taylor found himself pitted against the bombastic Musk.
In early 2022, Musk unexpectedly offered to purchase Twitter for $44 billion, only to then try to pull out of the deal. Taylor and the Twitter board then sued Musk, ultimately forcing him to follow through on the purchase.
Now Musk and a group of investors have made a $97.4 billion offer to buy the assets of the nonprofit board of OpenAI, which Musk cofounded in 2015 and left in 2018 after losing a power struggle with a group of other cofounders, led by current CEO Sam Altman. Musk and Altman’s mutual loathing forms the backdrop of this new drama, but Taylor, as OpenAI’s board chair, is once again a central player.
‘Let’s take the emotion out of this’
Dealing with an aggressive Musk is no easy task, as text conversations between Taylor and the mogul—released in the course of their court battle—made clear.
Musk had built up a significant stake in Twitter at the start of 2022, and in early April the company announced that Musk would be joining its board. Within a few days, Musk tweeted out trash-talk about the platform (“Is Twitter dying?”) and told CEO Parag Agrawal that he would be launching a bid to take Twitter private rather than becoming a board member.
“Can you take 10 minutes to talk this through with me? It has been about 24 hours since you joined the board,” Taylor wrote, adding politely that he just wanted to “understand about the sudden pivot and make sure I deeply understand your point of view and the path forward.”
After Musk made his bid and Twitter accepted it and Musk pulled out, it was Taylor rather than Agrawal who dealt directly with Musk through the ensuing court battle, and who publicly represented the company during that ordeal.
While Musk tweeted his perspective furiously and prolifically, Taylor kept his statements calm and infrequent, refuting his opponent’s claims about spam bots and maintaining that Twitter would prevail in court. Musk eventually gave up and went back to his original offer, so Twitter would drop its suit. The deal closed in October of that year.
As Axon CEO Rick Smith put it in a 2022 Bloomberg article about Taylor, who had been a board member at the Taser maker: “Bret would be the guy that would say, ‘Okay, let’s pause for a second, take the emotion out of this, and let’s just put the factors on the board.’”
Taylor’s new showdown with Musk could prove to be just as tumultuous as the last, but the situation now is different in key ways.
“It is a lighter load in that there are no shareholders that will pressure [Taylor] one way or the other, but this is an issue that’s highly public and controversial, so he will have public pressure given the seriousness with which people are taking the development of AI,” said Charles Elson, the Edgar S. Woolard chair in corporate governance at the University of Delaware.
Elson highlighted Musk’s proximity to President Trump, whose reelection campaign he funded and who has appointed him to slash government spending and streamline government bureaucracy, which, both Trump and Musk have claimed, without good evidence, is wasteful and corrupt. As Taylor’s opponent is so highly connected, he said, “it will be as challenging [as the Twitter takeover] though in a slightly different way.”
History rhymes
As was the case the last time, Musk and his target’s CEO are no friends. Musk turned on Agrawal after the latter complained about Musk’s tweets about Twitter and expressed a lack of trust in the Tesla boss. Once he had bought Twitter, Musk fired Agrawal and withheld the $38.7 million “golden parachute” that he would have had to pay him if he had allowed him to resign first; Agrawal’s wrongful termination suit is still ongoing.
Fast-forward to this week, and the bad blood between Musk and Altman is the stuff of legend. After Altman publicly rejected the OpenAI offer, mischievously adding that OpenAI could “buy Twitter for $9.74 billion if you want,” Musk called him a swindler. “Probably his whole life is from a position of insecurity, I feel for the guy,” Altman said in a subsequent interview, responding to the suggestion that Musk wants to buy OpenAI because he sees deficiencies in his own competing AI firm, xAI.
It may be best for OpenAI that it is Taylor rather than Altman—a board member but not chair—who will be in charge of the board’s official response to Musk’s offer. Taylor has an advantage this time around, thanks to the structure that OpenAI is trying to shed but still has.
Unlike Twitter, OpenAI is a nonprofit organization with an overriding AI-safety mission, that happens to control a for-profit arm; it is this part that actually carries out the development of OpenAI’s software, and it has already taken investment from the likes of Microsoft. The setup has caused no end of difficulty for OpenAI in the past couple of years, as its AI development efforts require ever-greater investment but investors worry that the OpenAI board’s safety-above-all-else commitment could lead it to make decisions that would hurt their chances of earning a solid return.
When OpenAI’s (now previous) board briefly ousted Altman in September 2023, Altman’s alleged prioritization of profit over safety was a major factor. And the board was able to kick him out without giving Microsoft a heads-up, because the nonprofit’s board has no fiduciary duty to investors in the for-profit. Taylor joined the board in the wake of that drama, after the previous board members lost the power struggle and Altman returned.
Musk has frequently derided OpenAI’s plan to go for-profit, which he claims is a betrayal of the organization’s original mission—though he would, of course, as owner of a rival AI firm, stand to benefit if OpenAI were to have difficulty in raising funds. Musk has also sued Altman and OpenAI cofounder Greg Brockman, alleging breach of contract, fraud, false advertising, and a host of other claims (including racketeering). Musk alleges Altman and Brockman enticed him to donate the initial money to set up OpenAI under false premises, saying it would be a nonprofit pursuing open science for the benefit of humanity, but actually later becoming a for-profit company that tightly controls access to its AI models and keeps critical aspects of its technology secret. That lawsuit is likely to go to trial, a federal judge said last week, though she declined to grant Musk an immediate injunction against the restructuring.
Nonprofit shield
OpenAI’s controversial structure may, for now, also be a shield against Musk’s takeover bid. As UCLA law professor Jill Horwitz told Fortune Tuesday, individuals and for-profit businesses cannot buy nonprofits, which can only be owned by other nonprofits. Musk can only buy OpenAI’s assets, and in doing so it is unlikely that he would gain the board control he would need to fire his nemesis, Altman.
This makes the OpenAI situation drastically different from what Twitter went through. It also suggests that Musk’s approach is not to be read at face value, but is rather an attempt to gum up the corporate transition that OpenAI is trying to undertake.
OpenAI will need to adequately compensate its nonprofit side if it goes for-profit, and Musk may have now effectively set the floor of that price at $97.4 billion, which is a lot of money, albeit less than the $300 billion valuation at which OpenAI is reportedly courting a $40 billion investment by SoftBank. (The consumer advocacy group Public Citizen says the compensation should go to “a new charitable foundation to carry out OpenAI’s original purpose.”)
Musk is “probably just trying to slow us down” to benefit xAI, Altman said Tuesday.
Now all eyes will be on Taylor and his board, to see how they respond to Musk’s approach. As UCLA Law’s Rose Chan Loui told Fortune Tuesday, if OpenAI were to confirm that it is considering the offer, it would also have to consider other unsolicited bids.
“Furthering the goals of the nonprofit is the guidepost that [Taylor] needs to take into account as he and his board respond to this offer,” said Elson, the corporate governance expert. “You have to put personal concerns at the door because your obligation goes beyond personality.”
ValueEdge Advisors vice chair Nell Minow told Fortune that “the board members would need a reason that has nothing to do with money to turn it over to someone with different goals, even if they were struggling to remain solvent, which they are not.
“What I would recommend to Taylor is to lawyer up big and fast, to bring on some expert consultants to examine the options and some big-time lawyers to prepare legal opinions on the board’s rights and obligations. This will give them time as well as ammunition,” Minow added.
Taylor had not responded to a request for comment at the time of publication. A request for Musk’s comment, sent to his lawyer, also went unanswered.
Update: This article was updated on Feb. 12 to include Minow's comments.
