Musk-Altman Clash Again as $97.4Bn OpenAI Buyout Offer Hits the Table

A consortium of investors led by Tesla chief executive Elon Musk has made a $97.4bn bid to buy ChatGPT maker OpenAI. The purpose of this bid, according to Musk's attorney Marc Toberoff, is to prevent OpenAI from pivoting from a nonprofit entity to a for-profit. The group of investors wants to retake control of the tech firm and revert it to its original charitable mission as a nonprofit research lab.

"It's time for OpenAI to return to the open-source, safety-focused force for good it once was. We will make sure that happens," Musk said in a statement. The consortium includes Musk-owned xAI, Baron Capital Group, Valor Management, Atreides Management, Vy Fund, Emanuel Capital Management and Eight Partners VC.

OpenAI chief Sam Altman responded to the bid through an X post stating, “no thank you but we will buy twitter for $9.74bn if you want."

During the last funding round, OpenAI was valued at around $157bn, significantly higher than the bid. As per recent talks of investment, the tech firm is reportedly valued at $300bn. However, Toberoff said that the consortium would be "prepared to consider matching or exceeding" any potential higher bid.

Also Read: Propaganda Machine? Elon Musk and Sam Altman Lock Horns Over AI Bias

Background

On the second day of his presidency, Donald Trump announced a $500bn investment over the next four years to build artificial intelligence (AI) infrastructure in the United States. This venture, known as ‘Stargate,’ is backed by Japanese conglomerate SoftBank, cloud giant Oracle, and OpenAI.

Despite being a key supporter of Trump’s new administration, Elon Musk was not included in the venture, with Sam Altman-led OpenAI being preferred instead. Reacting to the announcement of the ‘Stargate Project,’

Musk claimed that the venture lacked the necessary funds for such an initiative, which led to a long back and forth between the two on X. Musk had previously sued Altman, accusing him of breaching a contract by pivoting OpenAI toward profit and arguing that he was going back on its pledge to develop AI responsibly and make it freely available.

Also Read: Trump Unveils $500Bn ‘Stargate’ with Sam Altman, SoftBank to Tackle China’s AI Advancements

Elon Musk-Sam Altman Rivalry

This bid to buy OpenAI is the continuation of a long-standing feud between the two tech heavyweights. Musk and Altman were the early investors and co-founders of OpenAI in 2015, with Musk first guiding the AI research organisation's path. However, Musk parted ways with OpenAI in 2018, claiming disagreements about the organisation's goals and safety regulations for the development of artificial general intelligence (AGI).

Musk has since been an outspoken opponent of OpenAI's strategy, especially after the business transitioned from a nonprofit to a capped-profit model in 2019.

The xAI CEO has launched various lawsuits against OpenAI and Sam Altman, alleging that the ChatGPT owner violates licensing agreements and antitrust laws. In one of his cases, Elon Musk claims that OpenAI and Sam Altman exploited him from the start when they 'lured' him into co-founding the business.