Elon Musk Leads $97 Billion Takeover Bid for OpenAI

[Georgealbert]

 

Elon Musk helped found OpenAI in 2015 but left the company three years later. (The Washington Post)

 

Elon Musk and a group of investors have launched a $97.4 billion takeover bid for OpenAI, the company behind ChatGPT, in a dramatic escalation of their long-running dispute over the future of artificial intelligence.

 

The offer, which falls significantly below OpenAI’s most recent valuation of $157 billion, was swiftly rejected by the company’s CEO, Sam Altman. In a post on X, Altman responded with a tongue-in-cheek reply: “No thank you, but we will buy Twitter for $9.74 billion if you want.” Musk fired back with a single-word response: “Swindler.”

 

The bid, revealed on Monday 10 February, comes amid an ongoing legal battle between Musk and OpenAI over the firm’s transition from a non-profit to a for-profit entity. Musk, who co-founded OpenAI in 2015 but left three years later, has accused the company of betraying its original mission of developing AI for the benefit of humanity.

 

Musk’s legal team argues that OpenAI’s restructuring violates its founding principles, and he has sought to block the move through the courts. His bid to acquire the company is seen as an attempt to regain control and steer it back towards open-source AI development.

 

The takeover bid is backed by Musk’s AI firm, xAI, alongside asset management funds linked to Tesla investors Ron Baron and Gavin Baker. Venture capitalist Joe Lonsdale’s 8VC is also part of the consortium. Musk’s lawyer, Marc Toberoff, has suggested that as a non-profit entity, OpenAI may be compelled to consider such a substantial offer.

 

However, OpenAI remains focused on its own investment and growth strategy. In October 2024, the company secured $6.6 billion in funding, valuing it at $157 billion, with Microsoft as its primary backer. Recent reports suggest OpenAI is in talks to raise additional funding that could push its valuation to as high as $340 billion.

 

The clash between Musk and Altman has also played out in Washington, where both tech leaders have been active during the early weeks of Donald Trump’s second presidency.

 

Altman recently appeared alongside Trump at the White House to announce a major AI infrastructure project, Stargate, designed to expand AI data centres with an initial investment of $100 billion. Musk, in turn, has launched the U.S. Department of Government Efficiency (DOGE), aimed at reducing federal spending.

 

Musk has publicly criticised Stargate, arguing that Altman and his investors lack the financial means to execute such an ambitious project. Trump himself has acknowledged the rift, remarking in a press conference that he is aware of Musk’s strong dislike for a key member of the Stargate initiative, presumably referring to Altman.

 

OpenAI’s leadership remains committed to restructuring the company into a for-profit entity while maintaining its original mission. The proposed changes would see the non-profit arm retain equity in the commercial business but relinquish control over its operations.

 

Musk, however, insists that OpenAI must return to its open-source roots. “It’s time for OpenAI to return to the safety-focused force for good it once was. We will make sure that happens,” he said in a statement.

 

Despite the high-profile nature of Musk’s bid, analysts believe OpenAI is unlikely to entertain the offer, given its backing from Microsoft and other investors. For now, the battle for control of AI’s future continues, both in the boardroom and the courtroom.

 

Based on a report in The Washington Post 11.02.2025.

 

-- 2025-02-12