Elon Musk Rumored $97.4 Billion Bid for OpenAI Amid Ongoing Feud with Sam Altman

Elon Musk, alongside a consortium of high-profile investors, has reportedly made a $97.4 billion offer to acquire OpenAI’s nonprofit controlling entity. This move, first reported by The Wall Street Journal, adds a significant twist to the ongoing rivalry between Musk and OpenAI CEO Sam Altman, as well as the broader debate over open-source AI versus commercialized AI development.

Musk’s Bid and Altman’s Response

Musk’s attorney, Marc Toberoff, submitted the bid on Monday to OpenAI’s board. Musk, who was a co-founder of OpenAI but left the organization in 2019, has since been highly critical of its pivot from a nonprofit entity into a for-profit powerhouse aligned with Microsoft. His stated goal with the acquisition is to return OpenAI to its original mission of open-source AI development.

"It’s time for OpenAI to return to the open-source, safety-focused force for good it once was," Musk said in a statement provided by Toberoff.

Sam Altman quickly responded on X (formerly Twitter), taking a jab at Musk’s management of X: "No thank you, but we will buy Twitter for $9.74 billion if you want."

This exchange highlights the growing tension between the two tech moguls, particularly as Musk has taken legal action against OpenAI, claiming that Altman’s leadership has abandoned the company’s original mission in favor of a more commercial approach driven by Microsoft’s multibillion-dollar investments.

Who Else Is Involved in the Bid?

Musk’s bid is being supported by several major investors and firms, including:

xAI – Musk’s AI startup, which could potentially merge with OpenAI if the bid is successful, Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, 8VC – A venture firm led by Palantir co-founder Joe Lonsdale, and Ari Emanuel – CEO of Endeavor, investing through his fund.

The backing of these firms indicates a growing interest in challenging OpenAI’s market dominance, as well as potential strategic realignment of AI development toward a more decentralized and open-source approach.

Why Would Musk Make This Offer?

Musk has long advocated for open-source AI, arguing that proprietary AI development poses a greater risk to public safety. He has accused OpenAI of monopolizing AI advancements and failing to ensure transparency. His lawsuit against OpenAI and Altman centers on allegations that the nonprofit’s structure has been exploited to benefit its for-profit subsidiary while downplaying the role of public interest.

Additionally, Musk is keen on positioning xAI as a competitor to OpenAI. By acquiring OpenAI’s nonprofit controlling entity, Musk could reshape the AI industry to align with his broader technological and ethical vision.

The Open-Source AI Debate

The tension between open-source and closed-source AI is at the core of this battle. OpenAI initially operated as a nonprofit focused on open-source AI development, but under Altman’s leadership, the company shifted toward a more closed, commercial approach, with major backing from Microsoft and other investors.

Companies advocating for open-source AI include:

Hugging Face – A leading platform that provides open AI models and encourages collaborative AI development.

Meta (Facebook) – Released LLaMA models to promote transparency in AI.

Mistral AI – An emerging AI company committed to open-source LLMs.

Falcon AI – Developed by the Technology Innovation Institute, providing free, high-quality AI models.

EleutherAI – Created GPT-NeoX, an open alternative to GPT-3.

MosaicML – Now owned by Databricks, a company expected to go public later this year, positioning itself as a major player in enterprise AI solutions.

Musk’s argument is that limiting access to AI models creates monopolistic risks, while Altman and OpenAI have argued that open-source AI could be misused for harmful purposes such as misinformation, cybercrime, and national security threats.

What’s Next?

Musk’s bid, if seriously considered, could dramatically alter the AI industry. However, OpenAI’s board has not yet confirmed whether it will entertain the offer. Additionally, OpenAI has previously dismissed Musk’s legal complaints, calling them baseless and an attempt to gain control of a company he left voluntarily.

Meanwhile, OpenAI is pursuing its own ambitious projects, including Stargate, a $500 billion investment in AI infrastructure. The legal and financial battle over OpenAI’s future is just beginning, and whether Musk’s offer will materialize remains uncertain.

For now, the AI industry continues to evolve, with Databricks potentially preparing for an IPO and the open-source vs. closed-source AI debate heating up further. With AI becoming increasingly integral to technological progress, the outcome of this power struggle will likely shape the next decade of innovation.