A Coalition of investors led by Tech Billionaire Elon Musk, has submitted an unsolicited bid of $97.4 billion to acquire the artificial intelligence (AI) company Musk co-founded, OpenAI.
This action escalates the ongoing conflict between Musk and OpenAI regarding the company’s direction and its shift from a nonprofit to a for-profit organisation.
Musk expressed his intention to restore OpenAI to its original mission as an “open-source, safety-focused force for good.”
However, OpenAI CEO Sam Altman swiftly dismissed the offer in a post on Musk’s social media platform, X (formerly Twitter), “No thank you, but we will buy Twitter for $9.74 billion if you want.”
Musk acquired Twitter for $44 billion in 2022, though its value has since declined significantly, according to external estimates.
The bid, which was backed by Musk’s AI startup, xAI, proposes to merge with OpenAI if the deal proceeds.
Other backers of the proposal include Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, Joe Lonsdale’s 8VC, and Ari Emanuel through his investment fund. Marc Toberoff, a lawyer representing the investor group, confirmed the bid in a statement but declined further comment.
This bid by Musk followed OpenAI’s ongoing efforts to transition into a multibillion-dollar for-profit AI giant.
Founder of Telluride Legal Strategies, Rob Rosenberg noted that Musk’s offer could complicate OpenAI’s transformation, regardless of its success.
“I think he’s trying to make a statement and bring more attention to the fact that OpenAI is still on this course to switch from being a non-profit to a for-profit company,” Rosenberg said.
He suggested that the bid aims to exert external pressure on OpenAI as it evaluates the value of its business segments during its transition.
“That value cannot be determined by insiders negotiating on both sides of the same table. After all, the public is OpenAI Inc.’s beneficiary, and a sweetheart deal between insiders does not serve the public interest,” he wrote.
LEADERSHIP understands that Musk and Altman have been at odds over OpenAI’s trajectory since its founding.
Musk accused the company of abandoning its original mission as a nonprofit focused on benefiting humanity through open-source and safety-driven AI development.
OpenAI denied these claims, attributing Musk’s criticism to his failed attempt to integrate the company into Tesla.
Since its inception as a nonprofit in 2015, OpenAI has secured billions of dollars in external funding, including a $13 billion investment from Microsoft.
In a revised lawsuit filed in August, Musk accused OpenAI of forming a “monopoly” with Microsoft, alleging that the partnership aimed to stifle competitors like xAI.
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