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 added fuel to 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.
The offer 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 being backed by his company xAI, which could be merged with OpenAI should the deal go through. Apart from that, 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 saw a very 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 a number of lawsuits against OpenAI in recent years, and late last year added 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.
