Elon Musk and Investors Offer $100 Billion for Control of OpenAI Nonprofit
Elon Musk and a group of investors have submitted an offer of nearly $100 billion to acquire control of the nonprofit structure holding OpenAI. This move, revealed by Musk’s lawyer, Marc Toberoff, complicates the plans of CEO Sam Altman, who aims to transform the organization into a for-profit entity.
This conversion, which marks a departure from OpenAI’s origins as a research institute, faces a major obstacle: the evaluation of the real value of the nonprofit structure that controls the commercial subsidiary. Musk, a co-founder of OpenAI before leaving its board in 2018, believes this transformation betrays the project’s initial mission.
A Growing Rivalry between Elon Musk and Sam Altman
Musk’s takeover proposal is part of an escalating rivalry between him and Altman. Since Musk’s departure from OpenAI, the two have become fierce opponents in the race for artificial intelligence. Musk has already taken legal action against OpenAI to block its transformation into a for-profit company, citing a diversion of the organization’s original assets.
The billionaire has openly justified his offer, stating, “It is vital that the charitable organization is fairly compensated for what its leadership is taking away from it: control of the most transformative technology of our time.”
However, OpenAI’s response has been immediate and dismissive. Altman swiftly brushed off the offer, declaring on X (formerly Twitter), “No thanks, but we can buy Twitter for $9.74 billion if you want,” in an ironic reference to Musk’s acquisition of Twitter for $44 billion.
An Offer Seen as a Publicity Stunt
Observers of OpenAI do not believe in the viability of this offer. A close associate of the company has called Musk’s proposal a “pure publicity stunt,” accusing the billionaire of fueling chaos around the company’s governance. In response, a member of Musk’s consortium challenged OpenAI by stating, “If they think it’s a publicity stunt, they can call our bluff.”
Musk’s offer is supported by his own AI company, xAI, as well as several influential financial partners, including Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, 8VC, and Endeavor CEO Ari Emanuel.
A Legal Standoff in Favor of OpenAI
The future of this offer is far from certain. OpenAI has no obligation to sell its nonprofit entity, and according to law professor Ann Lipton, Musk has no legal leverage to force the sale. “As long as this structure remains in place, he has an obligation to continue its mission,” she explained.
OpenAI, which has a massive $500 billion AI infrastructure project in the works, is in discussions to raise new funds at a pre-money valuation of $260 billion. Meanwhile, the transformation to a commercial model initially valued its nonprofit entity at around $30 billion, a figure that Musk’s lawyers consider significantly undervalued.
If this $97.4 billion offer were to be taken seriously, it would represent a colossal financial return for Musk, who had invested tens of millions of dollars in OpenAI in its early days. But for now, Sam Altman’s company does not seem willing to succumb to this dramatic takeover attempt.
