Musk-led Group Offers $97.4B to Buy OpenAI; Altman Rejects

A group of investors led by Elon Musk has proposed a $97.4 billion offer to acquire OpenAI, intensifying a legal dispute with the AI company Musk co-founded.

Musk, his AI startup xAI, and a consortium of investment firms aim to take control of ChatGPT's creator and return it to its original nonprofit research lab mission, according to Musk's attorney, Marc Toberoff.

OpenAI CEO Sam Altman swiftly declined the offer on Musk's social platform X, jokingly responding, "No thanks, but we’ll buy Twitter for $9.74 billion if you’re interested."

Musk acquired Twitter, now known as X, for $44 billion in 2022.

Musk and Altman, who co-founded OpenAI in 2015 and later clashed over leadership, have been engaged in a long-standing dispute about the startup's direction since Musk stepped down from its board in 2018.

An early investor and board member of OpenAI, Musk filed a lawsuit against the company last year, initially in California state court and later in federal court, claiming it had deviated from its original mission as a nonprofit research lab dedicated to the public good. Musk had invested approximately $45 million in the startup from its inception until 2018, according to Toberoff's statements in court last week.

Musk and OpenAI's lawyers appeared in a California federal court last week, as a judge considered Musk's request for an injunction to prevent the ChatGPT creator from transitioning into a for-profit company.

US District Judge Yvonne Gonzalez Rogers has not yet made a ruling on Musk's request but noted in court that it seemed unlikely Musk would face irreparable harm if she does not intervene to halt OpenAI's planned shift toward becoming a for-profit corporation.

The judge also expressed concerns about OpenAI's relationship with its business partner, Microsoft, and stated she would not block the case from proceeding to trial next year, allowing a jury to decide the outcome.

"It’s possible that what Musk is claiming is true. We’ll find out. He’ll take the stand," she remarked.

In addition to Musk and xAI, the bid is supported by investors such as Baron Capital Group, Valor Management, Atreides Management, Vy Fund, Emanuel Capital Management, and Eight Partners VC.

Toberoff stated that if Altman and OpenAI's current board are determined to shift to a fully for-profit model, it is crucial that the charity is properly compensated for losing control over what he described as the most transformative technology of our time.

Toberoff further emphasized that Musk, as a co-founder of OpenAI and a successful tech leader, is the best person to safeguard and advance OpenAI's technology.