Technology
Musk Intensifies His Battle for OpenAI with a $97.4 Billion Offer
Feb
Musk Escalates OpenAI Battle: A group of investors led by Elon Musk has submitted a $97.4 billion bid to acquire the nonprofit organization overseeing OpenAI. The proposal, sent to the board on Monday, complicates Sam Altman’s plans to transform OpenAI into a for-profit company and invest up to $500 billion in artificial intelligence infrastructure.
Musk’s Vision for OpenAI
Musk argues that OpenAI must return to its roots as an open-source platform focused on safety and the common good. “We will ensure that happens,” he stated in a press release. OpenAI has not yet responded to the offer.
OpenAI’s Evolution and Internal Conflict
OpenAI was founded in 2015 as a nonprofit but established a for-profit subsidiary in 2019 to attract investment, including funding from Microsoft. Altman now seeks to turn it into a conventional company while separating the nonprofit, which still holds an equity stake.
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A Deal That Could Redefine OpenAI’s Ownership
Musk’s proposal, if accepted, would ultimately give him substantial control over the new OpenAI, reshaping its leadership and strategic direction. Additionally, the funding originates from xAI and several investors, such as Valor Equity Partners and Baron Capital, strengthening financial backing. Moreover, this investment consortium enhances the credibility of Musk’s bid, increasing the likelihood of a successful acquisition. Notably, Ari Emanuel, CEO of Endeavor, is also participating, further reinforcing the deal’s potential impact on OpenAI’s future structure.
Legal Disputes Between Musk and OpenAI
Musk has sued OpenAI, accusing it of betraying its original mission by favoring Microsoft. In January, his lawyer requested a public bidding process to determine the true value of the nonprofit’s assets. OpenAI denies these allegations, stating that the entity will receive fair compensation.
Stargate and Tensions with Trump
Altman initially unveiled the Stargate project alongside Trump; meanwhile, Musk was absent and later accused him of being a “fraud” on X. As a result, OpenAI now faces considerable obstacles in transitioning to a for-profit entity, as major investors grow increasingly skeptical. Furthermore, Meta and other stakeholders have raised concerns regarding the company’s restructuring strategy and its broader market consequences. Consequently, OpenAI must carefully navigate intricate negotiations to maintain investor trust and facilitate a seamless corporate transformation.
An Uncertain Future for OpenAI
OpenAI aims to finalize its transition by 2026 after securing $6.6 billion in funding, valuing the company at $157 billion. It is negotiating an additional $40 billion investment, led by SoftBank, potentially increasing its valuation to $300 billion. Musk’s unsolicited offer introduces uncertainty, challenging OpenAI’s planned corporate restructuring and financial trajectory. Investors now face critical decisions regarding the company’s future direction and governance structure.
