A consortium of investors led by Elon Musk offered $97.4B to buy the nonprofit that controls OpenAI last Monday.
Musk said in a statement provided by his attorney Marc Toberoff:
It’s time for OpenAI to return to the open-source, safety-focused force for good it once was. We will make sure that happens.
Sam Altman promptly replied with a post on X that read:
no thank you but we will buy twitter for $9.74 billion if you want.
To which Musk replied:
Swindler
Bret Taylor, chairman of OpenAI's board, followed up with a more professional statement:
OpenAI is not for sale, and the board has unanimously rejected Mr Musk’s latest attempt to disrupt his competition. Any potential reorganisation of OpenAI will strengthen our non-profit and its mission to ensure AGI [artificial general intelligence] benefits all of humanity.
Here's a brief history of the feud between Musk and Altman:
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December 2015: Musk and Altman co-founded OpenAI as a nonprofit organization dedicated to ensuring that artificial intelligence benefits all of humanity.
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2018: Musk departed from OpenAI's board after an unsuccessful attempt to assume control, expressing concerns over the organization's direction and transparency.
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2022: Following OpenAI's release of ChatGPT, Musk criticized the company for deviating from its original open-source mission and transforming into a for-profit entity.
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March 2024: Musk filed a lawsuit against OpenAI, Altman, and co-founder Greg Brockman, alleging that the company had strayed from its founding principles by prioritizing profit over public benefit.
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August 2024: Musk revived his lawsuit against OpenAI, this time including Microsoft as a defendant, accusing them of creating a lucrative monopoly and betraying OpenAI's original mission.
- December 2024: OpenAI released a timeline of events showing that Musk wanted OpenAI to transition to a for-profit as far back as 2017 and at the time demanded “majority equity, absolute control, and to be the CEO of the for-profit” — but that the organization rejected his terms, which was the real reason Musk left OpenAI.
Was it a legitimate offer from Musk? Or just a way to harass Altman?
Either way, Musk would likely need to bring more to the table than $97.4B. OpenAI was valued at $157B in its last funding round, and SoftBank is currently in talks to lead a funding round of up to $40B in OpenAI at a valuation of $300B.
Some experts believe that the offer was not made in earnest and was intended solely to complicate OpenAI's ongoing fundraising efforts and its transition to a for-profit structure. Musk’s bid for just the nonprofit organization (and not for the new for-profit division that would own equity in the nonprofit) sets a high bar and could mean whoever runs the nonprofit would end up with a large and possibly controlling stake in the new for-profit OpenAI.
On January 7, Toberoff submitted a request to the attorneys general of California, where OpenAI operates, and Delaware, its state of incorporation, urging them to initiate a bidding process to assess the true market value of its charitable assets, arguing that OpenAI might undervalue its nonprofit entity when transitioning it into a for-profit company. Musk's investor group said it is prepared to match or exceed any bids higher than their own.
Gil Luria, analyst at D.A. Davidson, said, “The offer seems to be backed by more credible investors … OpenAI may not be able to ignore it. It will be the fiduciary responsibility of OpenAI’s board to decide whether this is a better offer, which could call into question the offer from SoftBank.”