A consortium of investors led by Tesla CEO Elon Musk has submitted an unsolicited bid to acquire OpenAI, the artificial intelligence (AI) company Musk co-founded, for $97.4 billion.
The move intensifies the ongoing clash between Musk and OpenAI over the company’s direction and its transition from a nonprofit to a for-profit entity.
In a statement, 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), quipping, “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 investors
The Wall Street Journal first reported the bid, which is backed by Musk’s AI startup, xAI, among other investors.
- According to the report, xAI could 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.
Motives behind the bid
The bid comes amid OpenAI’s ongoing efforts to transition into a multibillion-dollar for-profit AI giant—a move Musk has publicly opposed.
Rob Rosenberg, founder of Telluride Legal Strategies, 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.
A long-standing feud
Musk and Altman have been at odds over OpenAI’s trajectory since its founding. Musk has accused the company of abandoning its original mission as a nonprofit focused on benefiting humanity through open-source and safety-driven AI development.
- OpenAI has 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 aims to stifle competitors like xAI.
- The lawsuit, which now includes 26 legal claims across 107 pages, underscores the deepening rift between Musk and his former venture.
