Elon Musk Announces May 10 Deadline for $97.4 Bn 'All Cash' OpenAI Bid

Elon Musk and a group of investors have offered to pay $97.375 billion "in cash" for OpenAI's operating assets, according to the official letter of intent, which specifies a May 10 deadline for acceptance or rejection.

The four-page letter of intent, which was filed in a federal California court on Wednesday, states that Musk's party expects to conduct a detailed review of OpenAI's "financial projections, including as to the OpenAI For- Profit Entities, with a focus on the key drivers of revenue growth and EBITDA."

The letter provides the first concrete details about Musk's surprise hostile bid to acquire the ChatGPT maker. Musk's lawyer announced on Monday that the group of investors had made an unsolicited bid for OpenAI, but the specifics of the transaction were not yet public. OpenAI CEO Sam Altman publicly rejected the offer in a tweet on Monday, but the board has yet to respond.

The correspondence states that the "buyer anticipates that one hundred percent (100%) of the total purchase price would be paid in cash," according to the letter. It additionally states that the "Buyer will not require third-party debt financing to be a contingency to closing the Transaction."

The consortium of investors joining Musk and his AI company, xAI, listed in the letter includes Baron Capital Group, Valor Management, Atreides Management, Vy Fund III, Emanuel Capital Management, and Eight Partners VC.

As part of the buyer's due diligence process, the letter states that OpenAI must grant it "access to any assets, facilities, equipment, books, and records of the Company in connection with the Business," as well as access to "particular personnel" involved in the business.

The four-page letter, signed by Elon Musk, was filed as an exhibit in the ongoing lawsuit between Musk, Altman, and OpenAI by OpenAI's attorney. OpenAI's lawyers claim that the letter "further exposes" that a recent motion was an attempt by Musk, CEO of AI competitor xAI, to undermine OpenAI.

The letter set a three-month deadline for OpenAI to either agree to a sale, decline negotiations in writing, or both parties agree to walk away.

The $97.4 billion valuation was based on OpenAI's "historical financial results as well as projections for the Company available to Buyer to date," according to the letter, though the final price will be determined by negotiation and other terms.