A group of investors, spearheaded by Elon Musk, has put forward an unsolicited bid to purchase the nonprofit entity that controls OpenAI for $97.4 billion. This move intensifies the ongoing conflict between Musk, CEO of Tesla, and OpenAI, a company he co-founded. Musk aims to return OpenAI to its original vision as “an open-source, safety-focused force for good,” according to a statement made by the billionaire.
In response, OpenAI CEO Sam Altman humorously rebuffed Musk’s offer on the social media platform X (formerly Twitter), writing, “No thank you, but we will buy Twitter for $9.74 billion if you want.” Musk previously acquired Twitter for $44 billion, though its value has reportedly declined since the purchase, based on external evaluations.
The Wall Street Journal, which first reported on the bid, noted that Musk’s AI venture, xAI, is backing the offer. The deal could potentially see xAI merge with OpenAI. Additional investors include Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, 8VC, and Ari Emanuel through his investment fund. Representatives from the investors have yet to comment on the offer.
While the seriousness of Musk’s bid remains unclear, legal experts suggest it may be a strategic move to disrupt OpenAI’s ongoing transformation into a for-profit corporation—a shift that Musk has vehemently opposed. Rob Rosenberg, founder of Telluride Legal Strategies, explained that even if the offer doesn’t materialize, it could complicate OpenAI’s efforts to transition from a nonprofit model.
Marc Toberoff, a lawyer representing the group of investors, suggested the bid was designed to exert external pressure on OpenAI while the company determines the value of its business as it transitions into a for-profit entity. He emphasized that any negotiations involving insiders should not be allowed to set the company’s value, arguing that a potential “sweetheart deal” would not serve the public’s interest.
Musk and Altman’s tensions have been brewing for years, fueled by differing visions of OpenAI’s future. Musk has criticized the organization for straying from its charitable roots and commitment to safety and openness, while OpenAI has rejected these accusations, with the company suggesting Musk’s frustrations stem from a failed attempt to integrate OpenAI into his Tesla empire.
Since its founding a decade ago, OpenAI has shifted significantly from its nonprofit origins. The company has secured billions of dollars in investments, including from Microsoft, which has raised concerns regarding the concentration of power in the AI space. Musk, in a revised lawsuit filed in August, has accused OpenAI’s partnership with Microsoft of fostering a monopoly and actively working against competitors like xAI by securing investor promises to avoid funding rival ventures. The amended lawsuit expands to 107 pages, up from 83 in the original filing.
Microsoft’s $13 billion investment in OpenAI has drawn scrutiny from the U.S. Federal Trade Commission, which is concerned that the deal could further entrench the tech giant’s dominance in cloud computing and the rapidly growing AI sector. Meanwhile, Japanese investment firm SoftBank is reportedly in talks to inject up to $25 billion into OpenAI, which could potentially surpass other investments and become the startup’s largest stakeholder. OpenAI is also negotiating with investors to achieve a $300 billion valuation.
In the midst of these developments, Microsoft recently renegotiated its multiyear deal with OpenAI, allowing the startup to use cloud services from other providers, provided that Microsoft does not wish to pursue the business itself. The revised agreement comes alongside the announcement of a new $500 billion joint venture between OpenAI, SoftBank, and Oracle to build cloud computing data centers in the U.S., dubbed Stargate.
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