San Francisco – Billionaire Elon Musk has made a bold move to take over OpenAI, the maker of ChatGPT, by offering a $97.4 billion bid through a consortium he leads. This development comes as OpenAI CEO Sam Altman continues efforts to transition the nonprofit AI research company into a for-profit entity, a move Musk has aggressively opposed.
Musk’s offer, announced on Monday, intensifies the long-running tensions between him and Altman over OpenAI’s direction. The billionaire entrepreneur, who co-founded OpenAI in 2015 but left before its rise, has long argued that the company has strayed from its original mission of developing AI for the benefit of humanity.
Altman Rejects the Offer, Mocks Musk
Shortly after Musk’s offer went public, Altman took to X (formerly Twitter) to dismiss it outright, stating:
“No thank you, but we will buy Twitter for $9.74 billion if you want.”
This sharp response underscores the deep-seated rivalry between the two tech moguls, with Musk suing OpenAI in August 2024, alleging it abandoned its nonprofit principles in pursuit of profit.
Musk’s Allies and the Bigger Battle Over AI
Musk’s consortium includes his AI startup xAI, Baron Capital Group, Emanuel Capital, and others. A merger between OpenAI and xAI is reportedly on the table if the deal materializes, as per a Wall Street Journal report.
Musk has consistently criticized OpenAI’s shift toward commercial AI dominance, especially its deep ties with Microsoft, which has invested billions into the startup and holds exclusive rights to OpenAI’s technology.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk said in a statement. “We will make sure that happens.”
Political and Financial Implications
Musk’s increasing influence extends beyond tech—he is a close ally of U.S. President Donald Trump, having spent over $250 million to support Trump’s election campaign. He also leads the White House’s Department of Government Efficiency, a new initiative focused on reducing federal bureaucracy.
His bid to acquire OpenAI also comes amid his opposition to a $500 billion AI project backed by the Trump administration, which OpenAI is leading. This adds another layer of complexity to the situation, as AI development becomes a key geopolitical and economic battleground.
Can Musk Afford the Deal?
Musk’s personal wealth is largely tied to his stakes in Tesla and SpaceX, which could complicate his ability to finance such a massive takeover.
- Tesla stock: Valued at approximately $165 billion
- SpaceX valuation: Tens of billions of dollars, which he could use as collateral
- Existing debt: After his $44 billion acquisition of Twitter (now X) in 2022, his leverage with banks may be limited
An investment banker, speaking anonymously, suggested Musk might sell part of his Tesla stake or leverage his SpaceX shares to fund the bid.
What’s Next for OpenAI?
OpenAI was recently valued at $157 billion, and SoftBank is in talks to invest up to $40 billion, bringing its potential valuation to $300 billion—a major leap from Musk’s offer.
With such high-stakes negotiations, legal challenges, and investor interests at play, Musk’s bid throws OpenAI’s future into uncertainty. Experts believe OpenAI’s board has a fiduciary duty to consider the offer, which could complicate its current fundraising efforts.
“This bid is definitely throwing a wrench in things,” said Jonathan Macey, a Yale Law School professor specializing in corporate governance. “If OpenAI rejects a higher offer in favor of a lower one, it raises concerns about whether they are truly acting in the best interests of their nonprofit mission.”
The Takeaway
Musk’s $97.4 billion bid for OpenAI represents a major escalation in the AI wars, with financial, legal, and political consequences. Whether OpenAI remains independent, merges with SoftBank, or faces Musk’s takeover, the battle over AI’s future control is far from over.
