A group of investors led by Tesla CEO Elon Musk has made an unsolicited proposal of $97.4 billion for OpenAI, the artificial intelligence (AI) company Musk co-founded.
The action exacerbates Musk and OpenAI’s continuing disagreement about the company’s course and conversion from a charity to a for-profit business.
Musk said he intended to return OpenAI to its founding purpose as a “safety-focused, open-source force for good.”
In a post on Musk’s social media network, X (previously Twitter), OpenAI CEO Sam Altman quickly rejected the offer, joking, “No thank you, but we will buy Twitter for $9.74 billion if you want.”
In 2022, Musk paid $44 billion for Twitter. However, outsider estimates indicate that the company’s value has drastically decreased.
The Investors
The deal, which is supported by Musk’s AI business, xAI, among other investors, was first reported by the Wall Street Journal.
- The report claims that if the deal goes through, xAI and OpenAI may merge.
- Valour Equity Partners, Baron Capital, Atreides Management, Vy Capital, Joe Lonsdale’s 8VC, and Ari Emanuel, through his investment vehicle, are among the other project proponents. The investing group’s attorney, Marc Toberoff, confirmed the bid in a statement but refrained from providing any details.
Reasons For The Bid
The offer coincides with OpenAI’s continuous attempts to become a multibillion-dollar for-profit AI behemoth, a development Musk has openly opposed.
According to Rob Rosenberg, founder of Telluride Legal Strategies, Musk’s offer might make OpenAI’s transition more difficult, regardless of its effectiveness.
Rosenberg stated, “I believe he’s attempting to make a statement and raise awareness of the fact that OpenAI is still on this path to transition from a non-profit to a for-profit company.”
According to him, the proposal’s purpose is to exert outside pressure on OpenAI as it assesses the worth of its business divisions throughout the transition.
Insiders negotiating on the same table cannot decide that value.
He wrote: “After all, the public benefits from OpenAI Inc., and a romantic arrangement between insiders is not in the public interest.”
A Long-Running Conflict
Since the beginning, Musk and Altman have disagreed about the direction of OpenAI. Musk has charged that the business has strayed from its initial goal as a nonprofit organisation dedicated to advancing open-source and safety-driven AI development for the good of humanity.
- OpenAI refutes these allegations, attribution Musk’s criticism to his botched attempt to incorporate the business into Tesla.
- OpenAI has raised billions of dollars from outside sources since launching as a nonprofit in 2015, including a $13 billion investment from Microsoft.
- Musk claimed in an amended complaint in August that OpenAI and Microsoft were creating a “monopoly” to suppress rivals such as xAI.
- The 107-page lawsuit, which already contains 26 legal claims, highlights the growing distance between Musk and his former business.
