A group led by Elon Musk has proposed a $97.4 billion bid to acquire the nonprofit controlling OpenAI, challenging the AI company’s transition into a for-profit firm. This move escalates Musk’s ongoing rivalry with OpenAI CEO Sam Altman, who dismissed the offer with a sarcastic post on X, stating, “No thank you, but we will buy Twitter for $9.74 billion if you want.”
Musk, who co-founded OpenAI with Altman in 2015 but later departed, launched his own AI venture, xAI, in 2023. As the CEO of Tesla and owner of X, Musk has positioned himself as a key political figure, closely aligned with former U.S. President Donald Trump.
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His influence extends to the Department of Government Efficiency, a White House initiative focused on reducing federal bureaucracy. Recently, Musk criticized a $500 billion OpenAI-led project supported by Trump’s administration.
OpenAI justifies its shift to a for-profit model as necessary to secure investment for developing advanced AI technologies. However, Musk has legally challenged this transition, accusing OpenAI’s leadership of prioritizing financial gains over the public good. In August 2023, he sued Altman and other executives, claiming they breached initial agreements meant to keep OpenAI nonprofit and committed to ethical AI development. In November, Musk sought a court injunction to prevent OpenAI’s structural transformation.
Reaffirming his stance, Musk declared, “It’s time for OpenAI to return to the open-source, safety-focused force for good it once was. We will make sure that happens.” OpenAI’s board, however, remains firm in rejecting Musk’s bid, as reported by The Information.
Musk’s consortium, which includes xAI, Baron Capital Group, and Emanuel Capital, is reportedly considering merging xAI with OpenAI if the acquisition succeeds. xAI recently secured $6 billion in funding, reaching a valuation of $40 billion.
Experts view Musk’s bid as a significant disruption to OpenAI’s plans. Yale Law professor Jonathan Macey pointed out that a nonprofit must ensure that any sale aligns with its mission, raising concerns if OpenAI refuses a higher offer in favor of another deal. OpenAI was recently valued at $157 billion, with SoftBank negotiating a new investment that could push its valuation to $300 billion.
Financing such a large-scale acquisition presents challenges for Musk, whose Tesla shares are worth approximately $165 billion. His recent $44 billion purchase of X has already stretched his financial leverage, making it unclear how he would fund the OpenAI bid. Analysts speculate that he might sell Tesla shares, secure loans against his stakes, or leverage his holdings in SpaceX.
Industry expert Gil Luria believes Musk’s bid could complicate OpenAI’s ongoing fundraising efforts and force the company’s board to reconsider its plans. He emphasized that OpenAI has a fiduciary duty to evaluate whether Musk’s offer is more beneficial than other proposals, including the potential SoftBank deal.
