ISLAMABAD: A consortium led by Elon Musk announced on Monday it has presented a $97.4 billion offer to purchase the nonprofit controlling OpenAI, marking the latest development in Musk’s ongoing effort to prevent the artificial intelligence company from transitioning into a for-profit entity.
This bid intensifies the long-standing conflict between Musk and OpenAI CEO Sam Altman, especially amid the rapid growth of generative AI technologies like ChatGPT. Responding to the offer, Altman humorously declined on X (formerly Twitter), writing, “No thank you, but we will buy Twitter for $9.74 billion if you want.”
Musk, who co-founded OpenAI in 2015 as a nonprofit but left before its rise to prominence, launched his own AI venture, xAI, in 2023. OpenAI, currently in the process of shifting to a for-profit model to secure the capital necessary for advancing AI research, has faced criticism from Musk, who filed a lawsuit last year claiming that the company violated its original nonprofit mission. Musk insists OpenAI should focus on benefiting humanity, not generating profits.
In his Monday statement, Musk called for OpenAI to return to its roots as an open-source, safety-focused initiative, stressing his commitment to ensuring that happens. Altman, however, informed staff that OpenAI’s board had no intention of entertaining Musk’s bid, according to a report by The Information.
Musk’s consortium, which includes xAI, Baron Capital Group, and Emanuel Capital, could explore a merger with OpenAI if the deal proceeds. While xAI recently raised $6 billion at a $40 billion valuation, sources told Reuters that any potential acquisition would have substantial financial implications, requiring Musk and his partners to secure significant funding.
Musk’s previous ventures, such as his $44 billion acquisition of Twitter (now X) in 2022, have strained his leverage with banks, but he may rely on his sizable stake in Tesla and SpaceX to finance the bid.
Analysts, including Gil Luria from D.A. Davidson, argue that Musk’s offer could complicate OpenAI’s transition to a for-profit structure, especially considering the potential influence of investors like SoftBank, which is in talks to lead a $40 billion funding round for OpenAI at a $300 billion valuation.
The offer has raised concerns about the future of OpenAI’s nonprofit status and its fiduciary responsibilities, leaving its board with the difficult decision of weighing Musk’s offer against other options for securing funding.
