Femi Ashekun/
Elon Musk and a group of investors, including his artificial intelligence startup xAI and several investment firms, have offered $97.4 billion to acquire OpenAI, the organisation behind ChatGPT.
Musk’s goal is to revert OpenAI to its original mission as a nonprofit research lab focused on developing AI for public good.
However, OpenAI CEO, Sam Altman, swiftly rejected the unsolicited bid on Musk’s social platform X, saying, “no thank you but we will buy Twitter for $9.74 billion if you want.”
Musk purchased Twitter, now rebranded as X, for $44 billion in 2022.
The offer marks an escalation in the ongoing dispute between Musk and OpenAI, a company Musk co-founded in 2015 but parted ways with in 2018.
Musk resigned from OpenAI’s board after clashing with Altman over the organisation’s direction.
Since then, Musk has criticised OpenAI for shifting away from its nonprofit roots, even suing the company last year. His lawsuits, filed in California state and federal courts, accuse OpenAI of abandoning its original mission of developing AI safely and equitably.
OpenAI transitioned to a “capped-profit” structure in 2019 to attract funding but remains controlled by a nonprofit board.
This hybrid structure has fueled internal conflicts, particularly after ChatGPT’s global success in 2021, which introduced new revenue streams and raised questions about the organisation’s future.
The board briefly fired Altman in late 2023 but reinstated him days later with a new leadership team.
Musk’s attorney, Marc Toberoff, emphasised the importance of compensating OpenAI’s nonprofit division if the organisation moves to a fully for-profit model.
Tax law requires that charitable assets be appraised at fair market value before being transferred to a for-profit entity. Toberoff also called for transparency in the process, urging regulatory oversight from California and Delaware authorities.
Last week, lawyers for Musk and OpenAI clashed in a California federal court. Musk sought a court order to block OpenAI’s potential for-profit transition, but U.S. District Judge Yvonne Gonzalez Rogers said it was a “stretch” to argue Musk would face irreparable harm if she didn’t intervene.
The judge allowed the case to proceed to trial, potentially starting next year.
“It is plausible that what Mr. Musk is saying is true. We’ll find out. He’ll sit on the stand,” Judge Rogers remarked, while also questioning OpenAI’s close relationship with business partner Microsoft.
The consortium backing Musk’s bid includes Baron Capital Group, Valor Management, Atreides Management, Vy Fund, Emanuel Capital Management, and Eight Partners VC.
Toberoff stated that Altman and OpenAI’s current leadership should ensure fair compensation for any charitable assets lost in the transition to a for-profit model.
Musk’s attempt to regain control of OpenAI reflects his broader concerns about the trajectory of artificial intelligence.
OpenAI’s leadership has yet to comment further on the rejected offer or the ongoing legal battles.
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