Musk Offers to Buy OpenAI for $97.4 Billion to Bring It Back to the Good Side

Elon Musk and a group of investors have put forward a proposal to buy the nonprofit division of OpenAI for $97.4 billion, The Wall Street Journal reports. The media has already called the deal “a dramatic escalation in Silicon Valley’s most bitter AI rivalry.” The proposal was presented to OpenAI’s board of directors on Monday morning.

Image source: OpenAI

The bid for OpenAI comes from a powerful coalition of Musk-backed investors, including his own AI company xAI and major venture capitalists such as Valor Equity Partners, Hollywood mogul Ari Emanuel and 8VC, the firm founded by Palantir co-founder Joe Lonsdale.

The proposal comes at a critical time for OpenAI. Some time ago, the company’s CEO Sam Altman began the process of turning it into a commercial entity. It was recently announced that OpenAI intends to raise $40 billion at a valuation of $340 billion. And in late January, the US AI megaproject Stargate was announced at a cost of $500 billion, and OpenAI is a key part of it.

For Musk, the proposal is his boldest move yet in his fight against OpenAI becoming a commercial organization. He believes the company has betrayed its original mission of developing AI safely and openly, and is currently suing OpenAI over the matter. Musk co-founded OpenAI with Sam Altman in 2015, but the Tesla CEO left the company in 2019.

«“It’s time for OpenAI to return to the open-source, security-focused force for good it once was,” Musk said in a statement provided to The Wall Street Journal by his lawyer Marc Toberoff. “We’ll make sure that happens.”

The offer also significantly complicates OpenAI’s planned transformation into a commercial company, as Musk’s team has promised to match or beat any higher offers. That creates a tricky situation for Altman, who is already in negotiations.

Shortly after the deal was reported in the media, Sam Altman posted the following statement on X: “No thanks, but we will buy Twitter for $9.74 billion if you want.” OpenAI pointed to Altman’s post when asked for comment. Musk’s representatives have not yet commented on the deal.