OpenAI Rebuffs $97.4 Billion Buyout Offer From Elon Musk Group

A group of investors led by Elon Musk, have reportedly made an extraordinary approach to buy AI startup OpenAI.

The Associated Press reported that Marc Toberoff, an attorney for Elon Musk, said that a group of investors led by Musk is offering about $97.4 billion to buy the non-profit behind OpenAI. The offer was reportedly sent to OpenAI’s counsel.

However OpenAI’s board of directors at the time of writing denied actually receiving a formal bid from the Elon Musk-led consortium of investors – said to include Baron Capital Group, Valor Management, Atreides Management, Vy Fund, Emanuel Capital Management and Eight Partners VC.

Trolling Musk

Reuters for example recorded comments from CEO Sam Altman when he was leaving the AI Summit in Paris.

As he left, Altman publicly stated Musk’s offer is “ridiculous”, and “the company is not for sale”.

“Altman also noted that the ‘offer’ was “another one of his (Musk’s) tactics to mess with us,” and he had not paid any attention to it, as it “doesn’t matter.”

And to further highlight his disdain for Musk’s offer, Sam Altman also publicly fired back using Musk’s own platform X (formerly Twitter), with a post that heavily trolled Musk’s purchase of Twitter.

“no thank you but we will buy twitter for $9.74 billion if you want,” he had tweeted.

It should be remembered that Musk had famously offered to purchase Twitter for $44 billion in April 2022, before he tried to back out of the offer and was sued by Twitter’s then board to honour the approach.

Musk relented and in late October 2022 finally closed the acquisition, paying the full $44 billion, and pledging the platform won’t become a “free-for-all hellscape.”

But Musk’s chaotic takeover of the platform was controversial to say the least, and the value of Twitter/X collapsed by as much as 71 percent after the acquisition, coupled with thousands of users leaving the platform amid an advertising exodus.

Bad blood

The bad blood between Musk and Altman is clear.

Elon Musk had sued OpenAI in March 2024 for breach of contract, alleging the firm was no longer following its original non-profit principles.

OpenAI then issued a very public and point by point rebuttal of Musk’s allegations, by directly comparing them to Musk’s own words within his own emails.

Musk abruptly withdrew his original lawsuit without explanation in June, a day before a judge was due to rule on OpenAI’s request for it to be dismissed.

But in August 2024 Musk filed a “more forceful” lawsuit, alleging that that OpenAI and its co-founders Sam Altman and Greg Brockman had gone against the company’s founding principles by prioritising commercial interests over the public good.

In September 2024 OpenAI said it was restructuring itself into “for-profit benefit corporation” – a significant move away from its “non-profit” roots.

In December 2024 Elon Musk asked a federal court for an injunction to stop OpenAI from converting into a full for-profit business.

Injunction a “stretch”

Lawyers for OpenAI and Musk last week faced off in a California federal court as a judge considered Musk’s request for a court order that would block OpenAI from converting itself to a for-profit company.

According to the AP, US District Judge Yvonne Gonzalez Rogers hasn’t yet ruled on Musk’s request but in the courtroom said it was a “stretch” for Musk to claim he will be irreparably harmed if she doesn’t intervene to stop OpenAI from moving forward with its planned transition.

But the judge also raised concerns about OpenAI and its relationship with business partner Microsoft, and said she wouldn’t stop the case from moving to trial as soon as next year so a jury can decide.

“It is plausible that what Mr. Musk is saying is true. We’ll find out. He’ll sit on the stand,” she reportedly said.

Musk in July 2023 founded his own artificial intelligence startup, xAI, which he hopes to challenge OpenAI’s ChatGPT with a ‘pro-humanity’ alternative chatbot offering called Grok.

OpenAI was co-founded by Sam Altman and Greg Brockman in 2015, but Elon Musk was an early investor (to the tune of $48 million), and Musk sought to take over the running of OpenAI before he resigned from the board in 2018.