Elon Musk and Investors Bid $97.4B to Take Control of OpenAI

Elon Musk, along with a group of investors, has reportedly made a $97.4 billion bid to acquire OpenAI's nonprofit division, intensifying his ongoing conflict with OpenAI CEO Sam Altman. According to a report the proposal, submitted by Musk's lawyer Marc Toberoff, challenges Altman's push to shift OpenAI into a for-profit organization and could have major implications for the company's future path.

Musk's AI company, xAI, is spearheading the $97.4 billion bid, with backing from prominent investors such as Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, and 8VC, the venture firm co-founded by Palantir's Joe Lonsdale. Additionally, Hollywood executive Ari Emanuel is supporting the deal through his investment fund.

Elon Musk, who co-founded OpenAI in 2015 but later parted ways with the company, has expressed strong disapproval of its move towards commercialization. Following news of his $97.4 billion bid, Musk stated, "It's time for OpenAI to return to the open-source, safety-focused force for good it once was. We will make sure that happens."

In response, OpenAI CEO Sam Altman took a jab at Musk on X (formerly Twitter), dismissing the offer and jokingly suggesting, “No thank you, but we will buy Twitter for $9.74 billion if you want,” tweaking Musk’s bid by shifting the decimal point.

OpenAI was originally a nonprofit. In 2019, it established a for-profit subsidiary to raise investments from the likes of Microsoft. Altman will split off the nonprofit but retain an equity stake in the newly structured company. Musk's $97.4 billion offer raises questions about the valuation of the nonprofit and potentially puts him or his investors in control.

Musk has filed a lawsuit against OpenAI, claiming it has strayed from its nonprofit mission by becoming too closely aligned with Microsoft. OpenAI is in talks with investors, including SoftBank, which could invest as much as $25 billion, to determine how to split the equity. Musk's offer puts pressure on the company, potentially changing its future and leadership.