Elon Musk Leads $97.4 Billion Bid to Acquire OpenAI, Faces Rejection from CEO Sam Altman

February 12, 2025 – Tech billionaire Elon Musk has made headlines once again, this time with a staggering $97.4 billion unsolicited bid to acquire OpenAI, the nonprofit organization behind the popular artificial intelligence tool ChatGPT. The offer, backed by Musk’s AI company xAI and a consortium of investors including Endeavor CEO Ari Emanuel, was submitted to OpenAI’s board on Monday, according to reports from The Wall Street Journal and other sources. However, OpenAI CEO Sam Altman swiftly dismissed the proposal, reigniting tensions in a long-standing feud between the two tech moguls.

The Bid and Its Context

Musk’s bid comes amid ongoing legal and strategic battles over OpenAI’s future. Co-founded by Musk and Altman in 2015 as a nonprofit dedicated to advancing AI for the benefit of humanity, OpenAI has since transitioned into a hybrid model with a for-profit arm, raising concerns for Musk about the organization’s direction. In recent years, Musk has criticized OpenAI’s shift, particularly its partnership with Microsoft, which he described in a 2024 lawsuit as turning the company into a “closed-source, de facto subsidiary of the largest technology company in the world,” according to Newsweek.

Musk’s attorney, Marc Toberoff, stated that the bid aims to return OpenAI to its original mission as an “open-source, safety-focused force for good,” as reported by The Wall Street Journal. The offer, if accepted, could lead to a merger between OpenAI and Musk’s xAI, a move that has raised eyebrows given Musk’s dual role as a tech industry leader and a “special government employee” through his work with President Donald Trump’s Department of Government Efficiency (DOGE), per nbc24.com.

Altman’s Rejection and Public Feud

Sam Altman, who has been at the helm of OpenAI during its rapid rise, rejected the bid outright, taking to Musk’s social media platform X (formerly Twitter) to quip, “No thank you but we will buy Twitter for $9.74 billion if you want,” according to cnbc.com. Musk, who acquired X for $44 billion in 2022, responded by calling Altman a “swindler” on the platform, escalating their public spat.

In an interview with Bloomberg TV at the AI Action Summit in Paris on Tuesday, Altman expressed skepticism about Musk’s motives, suggesting the bid was driven by “insecurity” and was part of a broader effort to “slow us down,” as reported by Hindustan Times and Forbes. “I feel for the guy,” Altman said, adding, “I don’t think he’s a happy person.”

Despite Altman’s dismissal, reports indicate that OpenAI’s board has not yet formally received the bid, according to a source familiar with the matter cited by Reuters. Internally, OpenAI employees have reacted with a mix of fear and exasperation, with the board reportedly planning to reject the offer if it is officially presented, per The Verge.

Legal and Financial Implications

Musk’s bid has stirred significant legal and financial questions, particularly regarding OpenAI’s complex structure. The nonprofit arm currently controls the for-profit entity, and Altman has been working to convert OpenAI into a traditional for-profit public benefit corporation to raise additional capital, a process that could be complicated by Musk’s offer, according to TechCrunch.

Analysts at Wedbush Securities, led by Daniel Ives, have suggested that Musk’s bid is unlikely to succeed, valuing OpenAI closer to $300 billion and viewing the offer as a tactic to disrupt the company’s fundraising efforts, per finance.yahoo.com. OpenAI recently raised $6.6 billion at a $157 billion valuation, with reports suggesting SoftBank may invest up to $40 billion, potentially valuing the company at $260 billion.

Legal experts have also noted that Musk’s bid could complicate OpenAI’s valuation, particularly regarding its charitable assets. Delaware Attorney General Kathy Jennings is reviewing OpenAI’s proposed changes to ensure compliance with its nonprofit mission, according to Reuters. Stephen Diamond, a lawyer who has represented Musk’s opponents in corporate governance battles, told TechCrunch that Musk’s offer “is throwing a spanner into the works,” potentially forcing OpenAI’s board to justify any future transactions involving its nonprofit assets.

Broader Implications

Musk’s bid has raised concerns about conflicts of interest, given his role in DOGE and his extensive involvement in the tech industry. White House spokeswoman Karoline Leavitt confirmed that Musk would recuse himself from any contracts involving DOGE if conflicts arise, per nbc24.com. However, critics like Geoff Harris of The National News Desk have pointed out that Musk’s influence over AI ventures like Stargate—a $500 billion AI infrastructure plan involving OpenAI, Oracle, and SoftBank—could be affected if his bid succeeds.

The bid has also drawn attention to Musk’s broader strategy across his portfolio of companies, including Tesla, SpaceX, and xAI. Some analysts, such as those at Splinter and Yahoo Finance, have suggested that the move is a distraction from challenges at Tesla, where stock prices have continued to slide.

What’s Next?

While Musk’s bid appears unlikely to succeed, it has intensified the spotlight on OpenAI’s future and the ongoing rivalry between Musk and Altman. Posts on X reflect public sentiment, with some users speculating about Musk’s intentions and others viewing the bid as part of the broader AI race, though these discussions remain inconclusive.

As OpenAI continues to navigate its transition and legal battles, the tech world watches closely. For now, Altman remains steadfast, telling reporters in Paris, “OpenAI is not for sale. The mission is not for sale,” according to MobiHealthNews. Whether Musk’s bid is a genuine attempt to reclaim OpenAI’s roots or a strategic maneuver to disrupt its momentum, one thing is clear: the stakes in the AI industry have never been higher.