A group of investors led by Elon Musk has submitted a $97.4 billion offer to acquire OpenAI, escalating tensions over the company’s future direction. Marc Toberoff, Musk’s attorney, confirmed the proposal was sent to OpenAI’s board on Monday, seeking to acquire “all assets” of the artificial intelligence company.
Musk’s Rivalry with Sam Altman Heats Up
The bid marks a new chapter in the ongoing dispute between Musk and OpenAI CEO Sam Altman. The two co-founded OpenAI in 2015 as a non-profit aimed at developing AI for the benefit of humanity. However, Musk departed in 2018, and tensions have since grown over OpenAI’s shift toward a for-profit structure.
Altman recently restructured OpenAI by dissolving its non-profit board, arguing that this change allows for the necessary funding to develop advanced AI technologies. Musk, however, claims this shift undermines OpenAI’s original mission.
In a sharp response to Musk’s bid, Altman sarcastically proposed to buy Musk’s social media platform, X (formerly Twitter), for $9.74 billion. OpenAI remains a dominant force in AI innovation, securing substantial funding and partnerships that position it as a market leader.
Musk’s AI Consortium and Motivations
Musk’s offer is backed by private equity firms such as Baron Capital Group and Valor Management, alongside his AI company, xAI. The stated goal of the acquisition is to realign OpenAI with its original vision—promoting open-source AI research and prioritizing safety over profit.
However, industry experts question Musk’s intentions. Christie Pitts, a technology investor, expressed skepticism, noting Musk’s competing AI firm. Pitts argues that Musk’s bid could be motivated by more than just restoring OpenAI’s founding principles.
The $97.4 billion bid is considerably lower than OpenAI’s recent valuation. In October, the company was valued at $157 billion, and some analysts project its worth could rise to $300 billion. Toberoff, Musk’s attorney, suggested the investment group is open to increasing its offer if necessary.
OpenAI’s Expanding Partnerships and Financial Future
OpenAI has been aggressively expanding its influence. Recently, it partnered with Oracle, a Japanese investment firm, and an Emirati sovereign wealth fund to launch The Stargate Project. This $500 billion AI infrastructure initiative, described as the largest in history, was announced by former U.S. President Donald Trump.
Despite Musk’s role as a key advisor to Trump, he has expressed doubts about The Stargate Project’s financial backing, claiming that promised funds have yet to materialize. However, Musk has not provided evidence to support these claims, raising further uncertainty around the initiative.
What’s Next for OpenAI?
The battle over OpenAI’s future reflects the broader challenges in the AI sector, where leadership, funding, and ethics are all under scrutiny. If Musk’s bid succeeds, it could significantly alter OpenAI’s trajectory. However, with competing interests and soaring valuations, the outcome remains uncertain.
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