Islamabad, Feb 11: Elon Musk and a consortium of investors have put forward a staggering $97.4 billion offer to acquire OpenAI’s nonprofit arm, escalating tensions in the ongoing battle over the company’s direction. Musk, who co-founded OpenAI in 2015 before parting ways, aims to prevent the organization from transitioning into a for-profit entity, arguing that its original mission to develop AI for humanity’s benefit is at risk.
Musk’s bid directly challenges OpenAI’s leadership, particularly CEO Sam Altman, who swiftly dismissed the offer with a pointed remark on X: “No, thank you. But we will buy Twitter for $9.74 billion if you want.” The rivalry between the two has intensified as OpenAI continues to dominate the AI landscape with ChatGPT, while Musk’s own AI startup, xAI, seeks to establish itself as a formidable competitor.
OpenAI’s transformation into a for-profit company is driven by the necessity of securing substantial capital for advancing AI research. However, Musk has been a vocal critic of this shift, filing a lawsuit in 2023 against Altman and other executives, alleging that they deviated from the company’s founding principles. The lawsuit claims OpenAI prioritized commercial success over its nonprofit commitments, leading Musk to seek legal intervention to block the transition.
The billionaire entrepreneur has also taken issue with OpenAI’s growing ties with Microsoft, a major investor in the company. Musk’s concerns escalated further after reports surfaced about a $500 billion AI initiative announced at the White House, in which OpenAI plays a leading role. Given Musk’s influence in both the tech and political arenas, his involvement in AI policy decisions remains a subject of intense debate.
The consortium backing Musk’s bid includes xAI, Baron Capital Group, Emanuel Capital, and other prominent investors. If the acquisition succeeds, xAI could merge with OpenAI, potentially reshaping the future of AI development. Sources indicate that xAI recently secured $6 billion in funding, bringing its valuation to $40 billion, further strengthening Musk’s financial position in this high-stakes contest.
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Despite Musk’s financial power, OpenAI’s valuation—estimated at $157 billion during its last funding round—poses a significant challenge. Reports suggest that SoftBank is in discussions to lead a $40 billion investment in OpenAI at a valuation of $300 billion. If the deal materializes, it could cement OpenAI’s dominance and make Musk’s takeover attempt even more difficult.
Industry experts believe that Musk’s proposal could disrupt OpenAI’s fundraising efforts and force its board to reconsider their strategic direction. As regulatory scrutiny intensifies and investors weigh their options, the future of OpenAI remains uncertain, with Musk’s intervention adding another layer of complexity to the unfolding drama.
