Elon Musk leads $132 billion bid for ChatGPT’s OpenAI, Sam Altman says ‘no thank you’
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Mr Elon Musk and OpenAI CEO Sam Altman have been fighting for control of the non-profit AI startup.
PHOTO: AFP
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NEW YORK - A consortium led by Mr Elon Musk said on Feb 10 it has offered US$97.4 billion (S$132 billion) to buy the non-profit that controls OpenAI, months after the billionaire sued the artificial intelligence (AI) start-up to block it from transitioning to a for-profit firm.
Mr Musk’s bid could ratchet up longstanding tensions with OpenAI chief executive Sam Altman over the future of the start-up at the heart of a boom in generative AI technology.
Mr Altman promptly posted on Mr Musk’s tech and social media company X: “No thank you, but we will buy Twitter for $9.74 billion if you want.”
Mr Musk acquired X, then called Twitter, for US$44 billion, but its value later diminished, according to outside estimates.
Mr Musk cofounded OpenAI with Mr Altman in 2015 as a non-profit but left before the company took off.
He founded the competing AI start-up xAI in 2023.
Mr Musk, the CEO of Tesla, is a close ally of US President Donald Trump.
He spent more than a quarter of a billion dollars to help elect Mr Trump and leads the Department of Government Efficiency, a new arm of the White House tasked with radically shrinking the federal bureaucracy.
Mr Musk recently criticised a US$500 billion OpenAI-led project announced by Mr Trump.
OpenAI is now trying to transition into a for-profit from a non-profit entity, which it says is required to secure the capital needed for developing the best AI models.
Mr Musk sued Mr Altman and others
In November, he asked a US district judge for a preliminary injunction blocking OpenAI from converting to a for-profit structure.
Mr Musk’s lawsuit against OpenAI and Mr Altman says the founders originally approached him to fund a non-profit focused on developing AI to benefit humanity, but that it was now focused on making money.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Mr Musk said in the press release. “We will make sure that happens.”
Mr Musk and OpenAI backer Microsoft did not immediately respond to requests for comment.
“Musk’s bid puts another wrinkle into OpenAI’s quest to remove the non-profit’s control over its for-profit entity,” said Ms Rose Chan Loui, executive director of the UCLA Law Centre for Philanthropy and Non-profits.
“This bid sets a marker for the valuation of the non-profit’s economic interests,” she said. “If OpenAI values the non-profit’s interests at less than what Musk is offering, then they would have to show why.”
The consortium led by Mr Musk includes his AI start-up xAI, Baron Capital Group, Emanuel Capital and others.
xAI could merge with OpenAI following a deal, according to the Wall Street Journal, which first reported Mr Musk’s offer earlier on Feb 10.
xAI recently raised US$6 billion from investors at a valuation of US$40 billion, sources have told Reuters.
Aside from any antitrust implications, a deal this size would need Mr Musk and his consortium to raise enormous funds.
Mr Musk’s stock in Tesla is valued at roughly US$165 billion, according to London Stock Exchange Group data, but his leverage with banks is likely to be thin after his US$44 billion buyout of Twitter in 2022.
To finance such a bid, Mr Musk could sell part of his stake in Tesla or take a loan against his stake, or use his stake in rocket company SpaceX which is worth tens of billions of dollars as collateral, according to an uninvolved investment banker.
“Musk’s offer to buy OpenAI’s non-profit should significantly complicate OpenAI’s current fund-raising and the process of converting into a for-profit corporation,” said D.A. Davidson analyst Gil Luria.
“The offer seems to be backed by more credible investors… OpenAI may not be able to ignore it.”
REUTERS
