Elon Musk and a consortium of investors have made a $97.4 billion bid to acquire OpenAI’s controlling nonprofit, intensifying the conflict over the AI company’s shift toward a for-profit structure. The offer, revealed on Monday, represents Musk’s latest move to prevent OpenAI from transitioning to a model he believes prioritizes profit over public benefit.
OpenAI CEO Sam Altman wasted no time in dismissing the bid. In a sharp response on X, he posted, “no thank you but we will buy Twitter for $9.74 billion if you want.” This reaction highlights the growing divide between Musk and OpenAI’s leadership.
Musk co-founded OpenAI with Altman in 2015 as a nonprofit focused on AI research for the public good. However, he departed before the company gained momentum. In 2023, he launched xAI, a competing AI venture, and has since been a vocal critic of OpenAI’s shift toward commercialization.
His legal battle against OpenAI started in August 2024, when he sued Altman and others, accusing them of violating OpenAI’s founding principles by putting profit ahead of ethical AI development. In November, Musk sought a court injunction to block OpenAI from officially transitioning into a for-profit entity.
OpenAI was last valued at $157 billion, making it one of the most valuable private companies globally. SoftBank is reportedly in talks to lead a $40 billion funding round, which could raise OpenAI’s valuation to $300 billion.
Musk’s bid, though substantial, raises significant financial challenges. His Tesla holdings are valued at $165 billion, but his ability to secure financing is uncertain, especially after his $44 billion acquisition of Twitter (now X) in 2022. Analysts suggest he could fund the deal by:
The bid is already disrupting OpenAI’s funding plans. Some analysts believe OpenAI’s board has a fiduciary responsibility to consider Musk’s offer, despite Altman’s rejection. Yale Law School professor Jonathan Macey noted that if OpenAI chooses to sell to another buyer for less, it could raise legal concerns about whether they are acting in the nonprofit’s best interest.
However, OpenAI and its backers, including Microsoft, have not formally responded to Musk’s proposal. Given OpenAI’s trajectory, it seems unlikely that the board will entertain Musk’s bid.
With Musk determined to steer OpenAI back toward open-source and safety-focused AI, and OpenAI firmly pushing forward with its for-profit transformation, the standoff is unlikely to end soon. Whether Musk’s bid gains traction or simply disrupts OpenAI’s fundraising efforts, the battle over AI’s future continues.
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