A consortium led by billionaire Elon Musk has made a staggering $97.4 billion offer to acquire the nonprofit that controls OpenAI, intensifying his ongoing battle against the artificial intelligence startup’s transition to a for-profit model. The bid, announced on Monday, marks a new chapter in the tensions between Musk and OpenAI CEO Sam Altman, who promptly dismissed the offer with a quip on X, saying, “No thank you but we will buy Twitter for $9.74 billion if you want.”

Musk vs OpenAI

Musk co-founded OpenAI with Altman in 2015 as a nonprofit dedicated to AI research for the public good. However, he parted ways with the company before its rise to prominence and later founded a competing AI firm, xAI, in 2023. His latest bid comes as OpenAI moves toward a for-profit structure, a shift the company argues is necessary to secure funding for cutting-edge AI development.

The billionaire has been vocal in his opposition to OpenAI’s trajectory, filing a lawsuit against Altman and others in August 2024. Musk contends that OpenAI has strayed from its founding mission, prioritising profits over public welfare. In November, he sought a court injunction to block the nonprofit’s conversion to a for-profit entity, stating that OpenAI was betraying its original purpose.

Musk, who is a close ally of President Donald Trump and a key figure in the White House’s Department of Government Efficiency, recently clashed with OpenAI over a $500 billion AI initiative unveiled by Trump. His bid to acquire OpenAI’s nonprofit could further disrupt the AI landscape, particularly given Microsoft’s significant stake in OpenAI. Microsoft and Musk’s consortium, which includes xAI, Baron Capital Group, and Emanuel Capital, have yet to comment on the proposal.

Legal challenges

Legal experts suggest that Musk’s offer places a financial benchmark on OpenAI’s nonprofit assets. Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits, noted that if OpenAI values its nonprofit entity at less than Musk’s bid, it would need to justify the decision. This high-stakes battle is expected to shape the future of AI governance and corporate ethics, as Musk continues to push for a return to OpenAI’s original open-source, safety-focused model.

As the AI industry watches closely, the outcome of Musk’s bid could redefine the power dynamics in the generative AI boom.

(With Reuters inputs)