Two Young Innovators Reject Elon Musk’s Multimillion-Dollar Offer To Build New AI Breakthrough

Last Updated:November 30, 2025, 13:43 IST

William Chen and Guan Wang of Sapient Intelligence rejected Elon Musk’s offer to develop their Hierarchical Reasoning Model.

Two childhood friends from Michigan are gaining global attention after walking away from a multimillion-dollar offer from Elon Musk to continue building what they believe could be the next major leap in artificial intelligence.

William Chen and Guan Wang, both 22, are the co-founders of Sapient Intelligence. Their partnership began in high school, where the two bonded over what they called “metagoals,” wildly ambitious visions for the future. For Wang, it was creating an algorithm capable of solving any problem. For Chen, it was designing systems that could optimise everything from engineering tasks to real-world processes.

“One day, we’re going to have an AI that’s smarter than humans,” Chen told Fortune. “If we don’t build it, someone else will. So we hope to be the first.”

After high school, Chen followed Wang to Tsinghua University in Beijing. Though the academic load was initially overwhelming, the pair soon won support from professors as they embarked on an ambitious AI research journey.

They began by challenging the dominance of current large-language models (LLMs). “Large-language models have structural limitations,” Chen said. “We want a new architecture that overcomes them.”

Their early success came with OpenChat, a compact LLM trained on high-quality conversations and refined using reinforcement learning. The model quickly became popular in academic circles.

“It got very famous,” Chen said.

OpenChat’s performance drew the eye of Elon Musk, who approached the pair with a multimillion-dollar offer through his company xAI. The two turned it down — a decision that pushed them fully into launching Sapient Intelligence.

Their new system, the Hierarchical Reasoning Model (HRM), is being hailed as potentially transformative. In June, a prototype with just 27 million parameters outperformed far larger systems from OpenAI, Anthropic and DeepSeek on tasks requiring structured reasoning — including advanced Sudoku, mazes, and the notoriously difficult ARC-AGI benchmark.

“It was crazy,” Chen said. “Just changing the architecture gave the model what we call reasoning depth.”

Unlike traditional transformer models that rely on statistical word prediction, HRM uses a two-part recurrent design meant to imitate human thought — a combination of deliberate reasoning and fast, instinctive responses.

“It’s not guessing,” Chen said. “It’s thinking.”

According to Sapient Intelligence, their models hallucinate far less than current LLMs and already match state-of-the-art performance in areas ranging from weather forecasting and quantitative trading to medical monitoring.

The company is now preparing to open a US office, with Chen and Wang positioning their work as a major step toward the next era of artificial general intelligence.

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