Elon Musk’s $97.4 billion offer to acquire OpenAI’s nonprofit arm is the latest salvo in a long-running feud between the billionaire and Sam Altman, CEO the ChatGPT-maker. Whether or not Musk’s intention is serious, his bid could put a wrench in Altman’s plans to convert the high-flying A.I. company, which operates under a capped-profit structure, into a fully for-profit one.
Musk and Altman’s disagreements have boiled over into public view for some time now. But the duo were once friends and fellow co-founders, having established OpenAI back in 2015 as a nonprofit A.I. research lab with a mission of developing the technology to benefit humanity. Musk left the organization three years later after a reportedly failed attempt to take it over. Last year, he founded a rival company called xAI.
OpenAI, however, is still very much on Musk’s mind. The entrepreneur has filed various legal complaints against OpenAI and Altman that accuse the company of pursuing profits over its founding goals.
Now, with a hefty takeover bid to purchase OpenAI’s nonprofit, Musk seemingly wants back in. Here’s a look at what’s unfolded between the two tech power players this week, and what implications the saga may have on the future of the world’s leading A.I. company.
What’s happened so far?
Monday (Feb. 10): Musk submitted the unsolicited offer to acquire OpenAI. “It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” said Musk in a statement provided to the Wall Street Journal. The bid comes from a Musk-led consortium that includes investors like Valor Equity Partners and firms led by Joe Lonsdale, co-founder of Palantir, and Ari Emanuel, CEO of Endeavor.
The offer is likely to complicate OpenAI’s for-profit conversion plans, which have been in the making for some time. Under the plan, OpenAI’s nonprofit arm will likely spin out from the company’s capped-profit portion and either receive a payout or retain shares in the restructured for-profit corporation. Musk’s bid set a lofty floor value for this potential transition.
The takeover was swiftly rejected by Altman, who included a swipe at Musk’s $44 billion acquisition of Twitter, now known as X, in his response. “No thank you but we will buy Twitter for $9.74 billion if you want,” said the OpenAI CEO on X. Musk struck back by calling Altman a “swindler.”
Tuesday (Feb. 11): The drama became increasingly personal the next day. When asked in a Bloomberg TV interview whether Musk’s bid came from a position of insecurity over xAI’s progress in comparison to OpenAI, Altman retorted, “Probably his whole life is from a position of insecurity.” The OpenAI chief followed up by labeling Musk as not “a happy person.”
Musk’s targeting of OpenAI is likely an attempt to curb the company’s progress, said Altman, who suggested Musk refocus his efforts on xAI. “I think he’s probably just trying to slow us down,” he said. “I wish he would just compete by building a better product.”
Reiterating that OpenAI is “not for sale,” Altman also stated that the nonprofit will still play a key role after a for-profit conversion is completed. “No matter what, the nonprofit will continue to be extremely important,” he said, adding that OpenAI’s board is “looking at lots of options about how to best structure for this next phase.”
Wednesday (Feb. 12): In a court filing, OpenAI accused Musk of hypocrisy. Drawing on Musk’s former legal claims against OpenAI that demanded it halt its for-profit conversion, the A.I. company highlighted that his own takeover offer “cannot be reconciled” with his argument that OpenAI’s assets should be kept by the nonprofit. “Musk would have [OpenAI] transfer all of its assets to him, for his own economic benefit and that of his competing A.I. business and hand-picked private investors,” read the filing, which noted that Musk’s previous complaints seemingly don’t apply “so long as Musk and his allies are the buyers.”
Later that day, Musk claimed that his takeover bid will be withdrawn if OpenAI puts a stop to its conversion plans. If OpenAI’s board “is prepared to preserve the charity’s mission and stipulate to take the “for sale” sign off its assets by halting its conversion,” the bid will be dropped, said Musk in a court filing. “Otherwise, the charity must be compensated by what an arms-length buyer will pay for its assets.”
Friday (Feb. 14): OpenAI’s board officially shut down Musk’s offer. “OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition,” said Bret Taylor, chairman of OpenAI’s board of directors, in a statement. “Any potential reorganization of OpenAI will strengthen our nonprofit and its mission to ensure A.G.I. benefits all of humanity.”