Elon Musk-led group offers $97.4 billion to gain control of Sam Altman’s OpenAI | World News

At the peak of a boom in generative AI (artificial intelligence) technology, Elon Musk’s bid could further tense up the long-standing rift with the OpenAI CEO.

Altman promptly responded to Musk’s bid and said in a post on X, “No thank you but we will buy twitter for $9.74 billion if you want.”

Elon Musk co-founded OpenAI with Sam Altman in 2015 as non-profit, but left the company before it made its mark on the tech map. In 2023, the Tesla CEO founded another competing AI startup xAI.

Notably, the billionaire is also a close ally of US President Donald Trump, under whose administration he is running the department of government efficiency. Musk had also spent several million dollars in Trump’s presidential election.

However, in recent times, Musk also condemned a $500 billion OpenAI-led project announced by Trump at the White House.

Musk-Altman rift

Altman’s OpenAI is now trying to transition into a for-profit, which the company says is required to secure the capital needed for developing the best AI models.

In August last year, Musk sued Altman and others under the claim that they violated contract provisions by putting profit ahead of the public good in a bid to push to advance AI. Then in November, the Tesla CEO sought a preliminary injuction from a US district judge to block OpenAI from becoming a for-profit organization.

In his law suit, Musk claimed that the founders of Altman’s firm had originally approached for funding a non-profit which would be focused on developing AI for humanity’s benefit. However, he alleged that the company was now focused on making money.

Elon Musk said in a statement on Monday, “It’s time for OpenAI to return to the open-source, safety-focused force for good it once was. We will make sure that happens.”

Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits, said, “Musk’s bid puts another wrinkle into OpenAI’s quest to remove the nonprofit’s control over its for-profit entity.

“This bid sets a marker for the valuation of the nonprofit’s economic interests. If OpenAI values the nonprofit’s interests at less than what Musk is offering, then they would have to show why,” she added.

Meanwhile, a Yale Law School professor specialising in corporate governance, Jonathan Macey, said that the bid “is definitely throwing a wrench in things”.

“The nonprofit is supposed to take money to do whatever good deeds, and if OpenAI prefers to sell it to somebody else for less money, it’s a concern for protecting the interests of the beneficiaries of the not-for-profit,” Macey said.

Notably, the Musk-led consortium also includes his own startup XAI, Baron Capital Group and Emanuel Capital, among others.

The Wall Street Journal reported that if Musk’s deal goes through, in any scenario, then XAI could merge with OpenAI. Recently, Elon Musk’s startup raised $6 billion from investors at a valuation of $40 billion,” sources told Reuters.

According to a January report, OpenAI was valued at $157 billion in its last funding round, cementing its mark as one of the most valuable private companies in the world.

(with Reuters inputs)