The investor group led by Elon Musk has placed a $97.4 billion bid to buy assets from the nonprofit that manages Openai, according to two people familiar with the bid. Sam Altman, CEO of Musk and Open.
The consortium includes Musk's artificial intelligence companies VY Capital and Xai, as well as Hollywood power broker Ari Emanuel and other investors.
The Wall Street Journal previously reported news of the offer.
Openai's bid is Musk's latest, perhaps the boldest attack on the organization that he helped create nearly a decade ago. It faces long odds: Openai's board of directors has formed a close alliance with Altman, and the CEO immediately chuckled Musk's bid.
“Thank you, I'll buy Twitter for $9.74 billion if necessary,” Altman said in X, referring to Musk's older name on social media platforms.
“Stolen goods,” Musk replied.
According to those familiar with Openai's potential response, Openai has not seen bids yet. Musk's unsolicited offer could complicate Openai's attempt to close a $40 billion funding transaction that nearly doubled the valuation of the well-known company just four months ago.
The new funding round, led by Japanese conglomerate SoftBank, treasures Openai at $300 billion, according to three people with knowledge of the transaction who spoke about the terms of anonymity. With the deal, Open, along with Musk's rocket company SpaceX and Tiktok maker SpaceX Company and Bytedance, makers of SpaceX, Tiktok.
Softbank has invested up to $40 billion in Openai, with other investors providing about a quarter of the total funds, people said. (New York Times sued Openai and its partner Microsoft, alleging that it infringes copyright in news content related to AI systems. Both companies denied the allegations in the lawsuit.)
Musk's bid could slow down the transition of a company that Altman and other Openai executives have been working on for over a year.
Musk, Altman and several other entrepreneurs and researchers said they wanted to establish Open Eye as a nonprofit in late 2015 and share technology freely with the world. When Musk left the organization three years later after a fight for control, Altman attached Openai to a commercial enterprise, allowing him to collect the enormous amounts needed to build AI technology.
However, the nonprofit committee continued to control Openai with an unusual arrangement. In late 2023, the board suddenly fired Altman and said it didn't trust him to build AI for the benefit of humanity, one of the non-profit principles. However, the exile lasted only five days.
After he returned, Altman and his colleagues began exploring ways to cut control over the nonprofit's company. He also began stacking up his allies and Openai's board of directors, providing a breakwater for other efforts to take control from him.
Openai's structure is very complicated, and Musk's bid shows that he understands its weaknesses. To separate from the nonprofit committee, Altman and his colleagues must compensate: Openai, for example, pays a one-time fee to a nonprofit organization or a minority stake in the company. I might give it.
Openai has over 2,000 employees, but the nonprofit that manages it has two employees and $22 million in cash and other assets. The reason why Musk and his investors pay billions is because it legally controls Openai.
However, nonprofit assets are not valued. That's what Musk is trying to establish in his new bid. His offer may mean that Openai's for-profit sector must spend more to gain independence from nonprofits.
“If Sam Altman and the current Openai Inc. board of directors are intended to be fully for-profit organizations, it is important that charities provide considerable compensation for what their leadership is robbing them of. Last year, Marc Toberoff, a Los Angeles lawyer who filed a lawsuit against Openai on Musk's behalf, said in a statement in The Times.
Openai's nonprofit committee is obligated to sell assets at fair market value, said Ellen P. Aprill, a senior scholar studying Los Angeles school's nonprofit laws. Musk's offer now appears to have set its value very high, she said. If a nonprofit organization accepts lower prices from Openai's for-profit sector, it may be necessary to explain to the state's charitable regulator why the charitable regulator left the higher bid.
“It's a huge complication for our current plan,” she added.
The proposal to shift Openai assets from nonprofits to for-profits has already been scrutinized by the state charity regulators in Delaware, where Openai was founded, and the state charity regulators in California, where its headquarters are located.
Musk, now one of President Trump's closest advisors, set up his own AI company in 2023, competed head-on with Openai. The company Xai has slowly caught up with an array of AI startups and tech giants, but Altman managed to beat Musk in Washington.
The day after Trump took office, he supported Openai, SoftBank and software company Oracle for plans to spend $100 billion on new data centers. Trump described the effort as “the much larger AI infrastructure project in history.”
On Monday, when Musk's offer was sent, Altman attended an AI conference in Paris, with other technical and political leaders, including French president Emmanuel Macron and Vice President JD Vance. I did.
