An investment group led by Elon Musk has made an unsolicited offer of $97.4 billion (approximately Rs. 8,46,576 crore) to acquire the nonprofit organization overseeing OpenAI, intensifying tensions between Musk and the artificial intelligence firm he co-founded.
Musk expressed his desire to revitalize OpenAI into an organization focused on transparency and safety, similar to its original mission. In a response on Musk’s social media platform X, OpenAI CEO Sam Altman quipped, “No thank you but we will buy Twitter for $9.74 billion (roughly Rs. 8,46,576 crore) if you want.” Musk previously purchased Twitter for $44 billion (roughly Rs. 3,82,437 crore), although its valuation has since declined, according to external assessments.
The Wall Street Journal was the first to report on Musk’s bid. OpenAI has not provided any comments regarding the proposal.
The offer is reportedly supported by Musk’s AI venture, xAI, which may potentially merge with OpenAI if the deal is successful. Investors also backing the bid include firms such as Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, and 8VC, led by Joe Lonsdale, as well as investment fund manager Ari Emanuel. Lonsdale declined to comment, and the other investors did not respond to inquiries.
Rob Rosenberg, founder of Telluride Legal Strategies, expressed uncertainty about the seriousness of Musk’s offer and his motivations behind it. He noted that even if the bid fails, it could complicate OpenAI’s ongoing transition from a nonprofit to a for-profit giant in the AI sector—a move Musk has opposed.
In a statement, attorney Marc Toberoff highlighted that one purpose of the offer is to exert outside pressure on OpenAI as it assesses the value of its business during its transition to a for-profit model.
“That value cannot be determined by insiders negotiating on both sides of the same table,” he stated. “The public is the beneficiary of OpenAI Inc., and a favorable arrangement among insiders does not serve the greater good.”
Musk and Altman have a history of disagreements regarding OpenAI’s direction since its inception. Musk has voiced concerns that the organization has strayed from its founding principles of prioritizing humanitarian rather than profit-driven motives. OpenAI disputed this characterization last year, asserting that Musk’s critiques stemmed from a failed attempt to integrate the firm into his automotive company, Tesla.
Since its establishment as a nonprofit, OpenAI has attracted substantial investments from companies like Microsoft. In a revised lawsuit filed by Musk in August, he labeled OpenAI’s partnership with Microsoft a “monopoly,” claiming it actively works to stifle competitors like xAI by securing commitments from investors not to fund rival projects. The updated lawsuit includes 26 legal issues over 107 pages compared to the 15 counts in the initial 83-page filing.
Microsoft’s $13 billion (approximately Rs. 1,13,005 crore) investment in OpenAI has raised antitrust concerns from the U.S. Federal Trade Commission regarding its potential to expand dominance in both cloud computing and the emerging AI market. Meanwhile, SoftBank Group Corp. is reportedly in discussions to invest up to $25 billion (approximately Rs. 2,17,317 crore) in OpenAI, which could position it as the company’s largest investor. Currently, OpenAI is negotiating with other potential investors to achieve a valuation of $300 billion (approximately Rs. 26,05,460 crore), according to reports.
Last month, Microsoft modified its long-term agreement with OpenAI, allowing the startup to utilize cloud computing services from competing providers, contingent upon Microsoft’s non-involvement in those business ventures. This adjustment accompanied an announcement of a collaboration involving OpenAI, SoftBank, and Oracle Corp. to establish a new $500 billion (approximately Rs. 43,42,565 crore) initiative aimed at building cloud computing data centers in the U.S., named Stargate.
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