Billionaire entrepreneur Elon Musk has submitted an unsolicited $97.4 billion offer to acquire OpenAI’s nonprofit parent entity, escalating his ongoing conflict with OpenAI CEO Sam Altman.
The bid, backed by Musk’s artificial intelligence firm xAI, Valor Equity Partners and entertainment mogul Ari Emanuel, was formally presented to OpenAI’s board of directors on Monday.
Musk’s Push to Restore OpenAI’s Original Mission
Musk, who co-founded OpenAI in 2015 but parted ways with the organization in 2019, has been vocal about his dissatisfaction with its direction.
He argues that OpenAI has strayed from its initial open-source and safety-focused mission and should be returned to its nonprofit roots.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk’s attorney Marc Toberoff stated in the proposal, as reported by The Wall Street Journal.
Altman Dismisses Musk’s Offer with Sarcastic Response
In a swift rebuttal, OpenAI’s CEO Sam Altman responded to Musk’s bid on X (formerly Twitter) with a pointed remark:
“No thank you, but we will buy Twitter for $9.74 billion if you want.”
The statement alludes to Musk’s controversial $44 billion acquisition of Twitter (now X) in 2022, which has faced scrutiny over its financial performance and strategic direction.
OpenAI’s Shift to For-Profit Sparks Controversy
Musk’s bid comes amid OpenAI’s transition from a nonprofit research lab into a for-profit company, a move that has drawn criticism from former insiders, including Musk.
OpenAI’s restructuring allowed it to secure billions in funding, including a substantial investment from Microsoft, which now holds an influential role in the company’s operations.
Musk and his supporters argue that Altman’s efforts to convert OpenAI into a fully for-profit corporation violate its founding principles.
“If Sam Altman and the present OpenAI Inc. Board of Directors are intent on becoming a fully for-profit corporation, it is vital that the charity be fairly compensated for what its leadership is taking away from it: control over the most transformative technology of our time,” Musk’s lawyer Toberoff added.
Regulatory Challenges and Investor Pushback
OpenAI’s shift toward privatization has faced legal and regulatory hurdles. Meta Platforms, a key AI competitor, has reportedly sent a letter to the California Attorney General opposing OpenAI’s restructuring plans.
Additionally, negotiations with investors, including Microsoft, remain a major obstacle to the transition.
Despite this, OpenAI’s valuation continues to soar, reaching $157 billion as of October 2024.
Musk’s Legal Disputes with OpenAI
Musk’s takeover bid follows a lawsuit he filed against OpenAI and Altman, alleging that the company has deviated from its original mission of advancing AI for humanity rather than profit.
The lawsuit claims that OpenAI was initially intended to be a public benefit organization, but has since prioritized commercial gains over ethical AI development.
Musk Challenges OpenAI’s Role in $500 Billion ‘Stargate’ AI Project
Adding to the tension, Musk has criticized OpenAI’s involvement in the $500 billion Stargate project, a U.S. government-backed AI initiative announced by President Donald Trump.
Musk has raised concerns over funding transparency and OpenAI’s dominance in AI development, questioning whether the project serves public interest or corporate gain.
Musk’s Group Ready to Outbid Competitors
Despite Altman’s rejection, Musk and his consortium have indicated they are prepared to increase their offer to counter any competing bids. With AI being one of the most sought-after technological frontiers, the battle for OpenAI’s future is expected to intensify in the coming months.
