Musk Offers $97.4 Billion to Acquire OpenAI Amid Legal Battle \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ Elon Musk and a group of investors have offered $97.4 billion to acquire OpenAI, seeking to return the ChatGPT maker to its original nonprofit mission. OpenAI CEO Sam Altman swiftly rejected the bid, escalating their ongoing legal feud. Musk has sued OpenAI, alleging it has abandoned its charitable purpose in favor of profit. A federal judge has allowed the case to move toward trial, raising concerns about OpenAI’s relationship with Microsoft.
Musk’s $97.4 Billion OpenAI Bid: Quick Looks
- Takeover Attempt: Musk and investors offer $97.4 billion to buy OpenAI.
- Altman’s Response: OpenAI’s CEO rejects the bid, mocking Musk’s X acquisition.
- Ongoing Legal Battle: Musk has sued OpenAI over its shift to a for-profit model.
- Court Ruling Pending: A judge questions OpenAI’s ties to Microsoft but allows trial.
- Investor Support: Several firms, including Baron Capital and Valor Management, back Musk.
- Regulatory Inquiry: Musk’s attorney contacts state officials about OpenAI’s nonprofit status.
Deep Look
The battle over OpenAI’s future has escalated as Elon Musk and a consortium of investors made a staggering $97.4 billion bid to acquire the company, seeking to restore its nonprofit roots. The bid marks the latest twist in Musk’s long-standing feud with OpenAI’s leadership and CEO Sam Altman, who immediately rejected the offer.
Musk, who helped co-found OpenAI in 2015, left the company’s board in 2018 and has since clashed with Altman over the startup’s direction. He has accused OpenAI of abandoning its original mission to develop AI for the public good and instead prioritizing commercial interests, particularly through its partnership with Microsoft.
Musk’s Takeover Bid and Altman’s Rejection
Musk’s offer was formally announced Monday, with backing from his AI startup xAI and several investment firms, including Baron Capital Group, Valor Management, Atreides Management, Vy Fund, Emanuel Capital Management, and Eight Partners VC.
According to Musk’s attorney, Marc Toberoff, the goal of the bid is to take control of OpenAI and return it to its original mission as a nonprofit research lab dedicated to public benefit rather than corporate profits.
However, Sam Altman dismissed the proposal outright, taking a joking swipe at Musk on X, his social media platform.
“No thank you, but we will buy Twitter for $9.74 billion if you want.”
The remark referenced Musk’s $44 billion purchase of Twitter in 2022, a move that has since been widely scrutinized.
Legal Battle Over OpenAI’s Nonprofit Status
Musk’s legal fight against OpenAI has been unfolding on multiple fronts. He first sued OpenAI in California state court, later expanding the case to federal court, arguing that the company’s conversion to a for-profit entity violates its founding agreement.
His lawsuit accuses OpenAI of:
- Betraying its original nonprofit mission
- Unfairly benefiting from public and charitable investments
- Becoming too closely aligned with Microsoft’s commercial interests
Musk claims he personally invested $45 million into OpenAI between 2015 and 2018 with the understanding that the organization would never become a profit-driven enterprise.
Last week, Musk and OpenAI’s lawyers faced off in a California federal court as U.S. District Judge Yvonne Gonzalez Rogers reviewed Musk’s request for a court order to block OpenAI’s for-profit transformation.
While the judge hasn’t ruled yet, she signaled skepticism over Musk’s legal claims, calling his argument “a stretch” and questioning whether he could prove he would be irreparably harmed if OpenAI continues its current path.
However, Judge Rogers also raised concerns about OpenAI’s ties to Microsoft, noting that the case should proceed to trial as soon as next year.
“It is plausible that what Mr. Musk is saying is true. We’ll find out. He’ll sit on the stand,” she stated.
Musk’s Push for Government Oversight
Beyond the courts, Musk and his legal team are also pushing regulators to intervene.
In January, Musk’s attorney sent a letter to the attorneys general of California and Delaware, urging them to investigate OpenAI’s nonprofit-to-for-profit transition.
Toberoff argued that OpenAI’s leadership is taking control of charitable assets without proper public oversight or compensation.
“If OpenAI’s board is intent on becoming a fully for-profit corporation, it is vital that the charity be fairly compensated for what its leadership is taking away from it: control over the most transformative technology of our time.”
He further asked regulators to ensure a competitive bidding process if OpenAI’s assets are transferred, implying that Musk’s bid should be considered in any formal sale.
What’s Next?
With Altman rejecting the bid outright, it’s unlikely that Musk will be able to acquire OpenAI voluntarily. Instead, the dispute is poised to play out in court, where Musk hopes to legally challenge OpenAI’s for-profit transition.
Several key developments are expected in the coming months:
- Judge Rogers will rule on Musk’s request for an injunction.
- The case will move toward trial, likely in 2025.
- Regulators could investigate OpenAI’s nonprofit status, adding another layer to the legal battle.
- Microsoft’s role in OpenAI’s governance could face further scrutiny, as concerns grow about its influence.
Despite Musk’s legal and financial muscle, OpenAI remains firmly under the control of Sam Altman and its current board—at least for now. Whether Musk can force changes through the courts or regulatory pressure remains an open question.
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