A consortium led by Elon Musk announced on Monday that it had offered $97.4 billion to purchase the nonprofit entity that controls OpenAI, marking a significant move in the billionaire’s ongoing effort to prevent the AI startup from transitioning into a for-profit organization.
Musk’s bid is expected to escalate longstanding tensions with OpenAI CEO Sam Altman over the future of the company, which is central to the booming field of generative AI technology. Altman quickly responded on X (formerly Twitter): “No thank you but we will buy Twitter for $9.74 billion if you want.”
Musk co-founded OpenAI with Altman in 2015 as a nonprofit, but left before the company gained traction. He founded the competing AI startup xAI in 2023.
Musk, the CEO of Tesla and owner of tech and social media company X, is a close ally of President Donald Trump. He spent over a quarter of a billion dollars to help elect Trump and leads the newly-formed Department of Government Efficiency at the White House, tasked with shrinking the federal bureaucracy. Musk recently criticized a $500 billion OpenAI-led project announced by Trump at the White House.
OpenAI is now attempting to transition from a nonprofit to a for-profit entity, which it says is necessary to secure the capital needed for the development of advanced AI models.
Musk filed a lawsuit against Altman and others in August, claiming they violated the principles of the contract by prioritizing profit over the public good in advancing AI. In November, he asked a U.S. district judge for an injunction to block OpenAI from converting to a for-profit structure.
Musk’s lawsuit argues that the founders initially approached him to fund a nonprofit focused on AI development for the benefit of humanity, but that the focus has since shifted to generating profit.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk said in a statement on Monday. “We will make sure that happens.”
Altman informed staff in a message that the company’s board of directors intends to make clear it has no interest in Musk’s “supposed bid,” according to a report from The Information on Monday.
Musk and OpenAI backer Microsoft did not immediately respond to requests for comment.
The consortium led by Musk includes his AI startup xAI, Baron Capital Group, Emanuel Capital, and others.
According to the Wall Street Journal, xAI could merge with OpenAI following the deal. xAI recently raised $6 billion from investors at a valuation of $40 billion, sources told Reuters.
“Throwing a Wrench”
“This (bid) is definitely throwing a wrench in things,” said Jonathan Macey, a Yale Law School professor specializing in corporate governance.
“The nonprofit is supposed to take money to do whatever good deeds, and if OpenAI prefers to sell it to somebody else for less money, it’s a concern for protecting the interests of the beneficiaries of the nonprofit.”
OpenAI was valued at $157 billion in its last funding round, cementing its status as one of the world’s most valuable private companies. SoftBank Group is in talks to lead a funding round of up to $40 billion in OpenAI at a valuation of $300 billion, including the new funds, Reuters reported in
