A group of investors led by Tesla CEO Elon Musk has offered to buy the non-profit arm of OpenAI for $97.4 billion, according to a report in The Wall Street Journal. The bid has fuelled an already bitter rivalry between OpenAI and Musk, who is suing the company for abandoning its open-source, non-profit mission and undermining fair competition. OpenAI chief Sam Altman has made known his lack of interest in the bid.
The offer was by submitted by Musk’s lawyer, Marc Toberoff, to the OpenAI board of directors on Monday. After the bid, Musk said, “It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,”.
Musk’s bid for OpenAI is backed by his company xAI, which could be merged with OpenAI should the deal go through. Musk’s external investors include Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital and 8VC, Hollywood company CEO, Ari Emanuel, and Palantir co-founder, Joe Lonsdale.
The offer by Musk led to a public rebuke by OpenAI CEO Sam Altman on X, the social media platform owned by Musk and previously called Twitter. Altman wrote, “No thank you but we will buy twitter for $9.74 billion if you want.”
Notably, Musk had bought Twitter in a $44bn deal in late 2022, but estimates suggest the company has been heavily devalued since then.
“Our structure ensures that no individual can take control of OpenAI…These are tactics to try and weaken us because we are making great progress.” Altman told his employees via an internal Slack message.
OpenAI vs Elon Musk:
Notably, OpenAI was founded as a non-profit in 2015 by Sam Altman, Elon Musk and others to counter Google’s dominance in the AI arena. However, Musk later left the company due to disagreements with the AI startup, and Altman took over as CEO.
In 2019, OpenAI set up a for-profit company that would allow it to take investment from the likes of Microsoft. The ChatGPT maker is now working to convert to a fully for-profit structure, with the non-profit having a stake in the new entity.
Musk has also filed several lawsuits against OpenAI in recent years, and in late last year, dragged Microsoft to the list. The Tesla boss claims that OpenAI and Microsoft are actively trying to “monopolise the generative AI market” by extracting promises from investors not to fund competing artificial intelligence companies such as xAI.
On November 17, 2023, OpenAI said it had ousted CEO Sam Altman after a review found he was “not consistently candid in his communications” with the board of directors. OpenAI went back on its decision to fire Sam Altman as its CEO five days later and noted that an in-principle agreement had been reached for the return of the 38-year-old. It also revamped the OpenAI Board that fired Altman.