We have spent much of the past 24 hours on the telephone trying to get to the bottom of Elon Musk’s hostile bid for Sam Altman’s OpenAI. It was a development in their corporate battle (or soap opera) that few could have seen coming. Altman, who is in Paris at an A.I. summit, hadn’t even seen the offer before rejecting it out of hand.

But what does it mean to make a hostile bid for a nonprofit? How do board members actually balance any fiduciary duties they owe to investors in a for-profit subsidiary versus their institution’s mission? The man in the middle of all of these questions is Bret Taylor, the board’s chair. Taylor has more experience dealing with a hostile bid by Musk than most: he was the chair of Twitter’s board when Musk bought it. We break it all down below.

Musk’s $97 billion spoiler effort

The latest twist in the OpenAI saga involves, of course, Elon Musk. A consortium led by the entrepreneur put a $97.4 billion offer on the table to essentially buy control of OpenAI.

It’s just the latest battle in the escalating fight between Musk and Sam Altman, two of Silicon Valley’s biggest figures. A sign of how things are going: Altman rejected the offer on X, writing, “no thank you but we will buy twitter for $9.74 billion if you want.” Musk replied, “Swindler.”

The blockbuster bid complicates things for OpenAI. The start-up is about to close a $40 billion fund-raising deal with SoftBank at a valuation of $300 billion. Altman also is trying to pull off a much-needed plan to convert the nonprofit OpenAI into a for-profit entity.

A question of the OpenAI board’s duties: Its directors don’t have any fiduciary responsibility to maximize returns, since it’s a charity. Board members include Bret Taylor, who sparred with Musk over his purchase of Twitter, and Larry Summers, the former Treasury secretary, whom Musk criticized just on Monday.