A group of investors led by tech billionaire Elon Musk has made a $97.4 billion unsolicited offer to acquire control of OpenAI, the AI powerhouse behind ChatGPT, adding a new twist to Musk’s ongoing legal dispute with the startup and its CEO Sam Altman.
The Wall Street Journal reports that the bid, which includes financing from prominent venture capital firms such as 8VC, Valor Equity Partners, Baron Capital, Atreides Management, and Vy Capital, as well as Endeavor CEO Ari Emanuel, comes as OpenAI is in the process of transitioning from a nonprofit to a for-profit entity. The offer also has the backing of Musk’s own AI company, xAI, which could potentially merge with OpenAI if the deal goes through.
In a statement, Musk expressed his desire to see OpenAI return to its roots as an “open-source, safety-focused force for good,” and vowed to ensure that this vision becomes a reality. However, OpenAI’s CEO Sam Altman swiftly rejected the offer, jokingly suggesting that his company would instead buy X for $9.74 billion, a jab at the price Musk paid to acquire the social media platform formerly known as Twitter. Musk responded to Altman’s quip by calling him a “swindler.”
The unsolicited offer was submitted to OpenAI’s board of directors on Monday by Musk’s attorney, Marc Toberoff, even as Musk continues to pursue legal action against the company in an effort to derail Altman’s plans to convert OpenAI into a for-profit venture. A federal judge recently ruled that portions of Musk’s lawsuit could proceed to trial, provided that Musk testifies on the stand.
According to Toberoff, Musk and his allies are prepared to match any competing offers for the nonprofit, emphasizing the importance of fairly compensating the charity for the control over what he described as “the most transformative technology of our time.”
The bid has raised questions about the future of OpenAI and who will ultimately control the company. OpenAI has maintained that its nonprofit arm will receive the full value of its stake in the firm, although it will no longer have oversight of its operations. The company plans to restructure as a for-profit public benefit corporation, which takes into account both societal impact and profitability when making decisions. As part of this transition, Altman is expected to receive an ownership stake in the company.
OpenAI recently secured $6.6 billion in funding at a valuation of $157 billion, and has committed to completing its shift to a for-profit entity within two years, or risk allowing investors to renegotiate the valuation.
Fortune reports that Musk’s bid may further complicate OpenAI’s corporate transition, which industry onlookers believe could be one of Musk’s motivations for the bid:
However, Musk’s bid could cause issues for OpenAI with the State of California.
If the State decides that Altman’s offer for the non-profit assets is too low in light of Musk’s—which is reportedly almost double what Altman was planning to pay—it could block the deal on those grounds.
Musk, who co-founded OpenAI alongside Altman in 2015 and was an early investor, later had a falling out with the company due to disagreements over its long-term direction. The two tech billionaires have since become fierce rivals, frequently exchanging public jabs while their respective companies compete in the race to dominate the AI industry.
Last year, Musk filed an amended lawsuit accusing OpenAI, key investor Microsoft, billionaire Reid Hoffman, and others of violating federal antitrust laws in an attempt to monopolize the AI market. In his suit, Musk alleges that OpenAI has strayed from its original mission of developing AI for the benefit of humanity, instead transforming into a “$157 billion for-profit, market-paralyzing gorgon.” OpenAI has denied these claims, calling Musk’s lawsuit a baseless and “increasingly blusterous campaign to harass OpenAI for his own competitive advantage.”
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
