Elon Musk and a consortium of investors have launched a bold $100 billion bid to seize control of OpenAI’s non-profit parent organization, complicating CEO Sam Altman’s ongoing efforts to transition the artificial intelligence company into a for-profit entity.
The unsolicited offer, submitted to OpenAI’s board of directors on Monday, underscores Musk’s deep opposition to Altman’s strategy of monetizing the AI powerhouse. Musk, a co-founder and early investor in OpenAI, left the board in 2018 and has since emerged as one of Altman’s most vocal critics. He has argued that converting OpenAI into a for-profit venture contradicts its founding mission of advancing artificial intelligence for the benefit of humanity.
A Growing Rivalry in AI Development
Musk’s bid adds another layer to the ongoing battle between the two tech entrepreneurs, whose rivalry has intensified as they compete to dominate the rapidly evolving AI industry. Musk’s xAI, a direct competitor to OpenAI, is actively working on its own AI models, seeking to challenge OpenAI’s dominance in the field.
Shortly after news of the bid broke via the Wall Street Journal, Altman took to social media platform X—formerly Twitter, which Musk acquired in 2022—to issue a snarky rebuttal. “No thank you, but we will buy Twitter for $9.74 billion if you want,” Altman posted, mocking Musk’s bid and referencing the billionaire’s own turbulent acquisition of the social media company for $44 billion.
Legal and Structural Challenges
Musk’s legal team has been actively challenging OpenAI’s restructuring efforts, arguing that the non-profit, which controls the company’s core mission, should not be converted into a for-profit entity without a competitive bidding process. Last month, Musk’s attorney, Marc Toberoff, called on attorneys general in Delaware and California to intervene and mandate an auction for OpenAI’s controlling non-profit arm.
However, OpenAI has signaled no interest in entertaining external offers. A company insider dismissed Musk’s bid as an attempt to sow discord, stating that OpenAI has no obligation to sell. Legal experts have pointed out that unless OpenAI’s governance structure is altered, the organization remains bound by its non-profit obligations.
“There’s nothing Musk can do but use soft persuasive power,” said Ann Lipton, a law professor at Tulane University. “The non-profit controls OpenAI, and until that structure changes, it has obligations to pursue its mission.”
Financial Disputes Over OpenAI’s Valuation
Musk’s bid also highlights a growing dispute over how to value OpenAI’s non-profit parent entity. While OpenAI is currently in discussions to raise new capital at a staggering $260 billion pre-money valuation, estimates for the non-profit arm’s worth vary widely. OpenAI’s internal discussions reportedly placed its value around $30 billion, but Musk’s legal team argues it should be significantly higher, demanding a competitive bidding process.
A higher valuation would potentially result in a substantial financial windfall for Musk, who contributed tens of millions of dollars to OpenAI during its formative years. If his bid were accepted, he could reclaim his early investments many times over.
Future of OpenAI and the AI Race
OpenAI’s shift toward for-profit status is already shaping the future of the AI industry. The company plans to invest $500 billion in AI infrastructure through Stargate, a SoftBank-backed initiative, further cementing its role as a key player in the sector.
