"OpenAI is not for sale, and the board has unanimously rejected Mr. Musk's latest attempt to disrupt his competition," chairman of the board Bret Taylor said in a statement posted by the company on Musk-owned X, formerly Twitter.
"Any potential reorganization of OpenAI will strengthen our nonprofit and its mission to ensure AGI (artificial general intelligence) benefits all of humanity," the statement continued.
Musk filed court documents on Wednesday saying that he would withdraw the offer to buy OpenAI if its board returns the artificial intelligence pioneer to a non-profit "charity" model.
OpenAI currently operates a hybrid structure, as a non-profit with a money-making subsidiary.
The change to a for-profit model -- one that Altman considers crucial for the company's development -- had exacerbated ongoing tensions with Musk.
Musk and Altman were among the 11-person team that founded OpenAI in 2015, with the former providing initial funding of $45 million.
Three years later, Musk departed the company, with OpenAI citing "a potential future conflict for Elon... as Tesla continues to become more focused on AI."
Musk established his own artificial intelligence company called xAI early in 2023 after OpenAI ignited global fervor over the technology.
The massive costs of designing, training, and deploying AI models have compelled OpenAI to seek a new corporate structure that would give investors equity and provide more stable governance.
The transition to a traditional for-profit company requires approval from California and Delaware authorities, who will scrutinize how the non-profit arm of OpenAI is valued when it becomes a shareholder in the new company.
Current investors prefer a lower valuation to maximize their share of the new company.
Musk's bid, valuing the OpenAI non-profit at $97.4 billion -- approximately $30 billion above the level in current negotiations, according to The Information -- appears designed to disrupt the company's fundraising efforts.
OpenAI's Chief Global Affairs Officer Chris Lehane has said Musk's offer came from a competitor "who has struggled to keep up with the technology and compete with us in the marketplace".
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