Elon Musk. Image: © Steve Jurvetson/Flickr (CC by 2.0)
Sam Altman has already publicly said ‘no, thank you’ to the offer but it could still cause a headache for the OpenAI founder.
A consortium of investors led by Elon Musk has offered to buy the non-profit that controls OpenAI for almost $100bn.
First reported by The Wall Street Journal, the unsolicited bid is backed by Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital and 8VC.
In a statement through the group’s lawyer Marc Toberoff, Musk said: “It’s time for OpenAI to return to the open-source, safety-focused force for good it once was.”
In response to the offer, OpenAI founder Sam Altman said, “no thank you,” in a post on X, while offering to “buy Twitter for $9.74bn” instead.
However, OpenAI’s board will have a fiduciary responsibility to consider the offer, especially if it is seen as a better offer in terms of protecting the beneficiaries of the non-profit.
Musk v Altman
Musk has been feuding with Altman for several years. Having co-founded the company in 2015, the Tesla CEO has said Sam Altman is not sticking to the original objective of developing AI for the benefit of humanity.
Last year, Musk filed a lawsuit against Altman for this, stating that OpenAI had “been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft”.
Following this, OpenAI responded with claims that Musk supported a for-profit model in 2017 and suggested attaching the business to Tesla “as its cash cow”. Musk’s lawsuit was dropped a few months later.
However, at the end of last year, Musk requested a court order to block the ChatGPT maker from becoming a for-profit company. Last week, US district judge Yvonne Gonzalez Rogers said the X owner’s claim that the move would cause irreparable harm is a “stretch” but agreed to allow the trial to move forward citing concerns about OpenAI’s relationship with Microsoft.
Another successful bid?
While Altman has made his feelings on the $97bn offer clear, it will likely cause a headache for him as he tries to take OpenAI private.
The non-profit must consider the offer and has a responsibility to sell its assets at a fair market value and with backing by reputable investors alongside Musk, the company’s board will have to weigh up what is best for its beneficiaries.
We don’t need to think back too far to remember a previous unsolicited offer Musk made that ended up being successful.
In 2022, the Tesla CEO made a $43bn offer to buy the social media site formerly known as Twitter. This deal was later completed and sparked a wave of controversy, including the renaming of the site to X, mass layoffs and several changes to the platform itself.
However, the drama from that deal has continued in the years since, with the US Securities and Exchange Commission filing a lawsuit against Musk last month (14 January) over allegations that he failed to disclose his purchase of Twitter shares in a timely manner.
Even if Musk’s $97bn bid is not accepted by the OpenAI board, it may force the company to rethink how it’s going about the conversion to a for-profit company.
Elon Musk. Image: © Steve Jurvetson/Flickr (CC by 2.0)
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