Elon Musk has made a significant move by offering to buy OpenAI’s operating assets for $97.4 billion, escalating his legal and business battle with OpenAI CEO Sam Altman. Musk’s offer is backed by his AI company xAI and several investors from his other ventures. The tension stems from Musk’s disagreement with OpenAI’s transition from a nonprofit organization to a fully for-profit structure, a shift that he believes contradicts the company’s original mission to develop AI for the public good. Musk has already filed a lawsuit against OpenAI, claiming that the company is abandoning its founding principles.
In response to Musk’s bid, Altman dismissed the offer and made a lighthearted counter-proposal on social media, suggesting that OpenAI would buy Twitter for $9.74 billion. Musk’s offer highlights the growing conflict between the two men, who co-founded OpenAI in 2015 but have since diverged in their vision for the company. Musk left OpenAI in 2018, and the company later created a for-profit subsidiary in 2019 to raise capital, which led to significant investments from Microsoft and other backers.
Legal experts suggest that Musk’s offer could complicate OpenAI’s ongoing restructuring, which is aiming to complete its transition to a for-profit organization by 2026.
The company was last valued at $157 billion, and its future plans include a potential $40 billion funding round with SoftBank’s involvement. However, Musk’s ability to finance the offer remains uncertain due to his limited leverage with banks, stemming from his $44 billion acquisition of Twitter. His legal team is pushing for a bidding process to determine OpenAI’s fair market value, arguing that the board is not fulfilling its fiduciary duty in considering his bid.
The stakes in this dispute go beyond the ownership of OpenAI. Musk has been a vocal advocate for open-source AI development, contrasting with OpenAI’s more closed, commercial model, especially in partnership with Microsoft. If Musk’s bid were successful, it could drastically alter OpenAI’s research direction and business strategy, while also impacting the broader AI landscape. The legal and financial complexities surrounding Musk’s offer could have lasting consequences for both OpenAI’s future and the ongoing debate over the role of AI in society.
