Elon Musk and a group of co-investors have submitted a near-$100 billion (€97 billion) bid for the non-profit that controls OpenAI, complicating chief executive Sam Altman’s attempt to convert the start-up to a for-profit entity.
Mr Musk, whose start-up xAI is a direct competitor to OpenAI, submitted the bid to the group on Monday, according to Musk’s attorney Marc Toberoff.
Mr Altman is in the process of converting OpenAI into a for-profit, moving the company away from its roots as a research organisation by spinning off its non-profit. One of the main barriers to the change has been establishing a fair value for the non-profit which, under the current structure, controls the company.
Mr Musk, a co-founder of OpenAI who invested tens of millions of dollars into the fledgling company before leaving its board in 2018, has said that the conversion to a for-profit betrayed the start-up’s founding mission.
He has already launched a lawsuit against Mr Altman and OpenAI attempting to block the conversion and is now bidding $97.4 billion for the assets held by the non-profit, which include a controlling stake in OpenAI’s for-profit subsidiary.
“It is vital that the charity be fairly compensated for what its leadership is taking away from it: control over the most transformative technology of our time,” said Mt Toberoff.
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Shortly after the Wall Street Journal first reported the unsolicited approach, Mr Altman said on social media site X, “no thank you, but we will buy Twitter for $9.74 billion if you want”. Musk bought Twitter in 2022 for $44 billion and renamed it X.
One person close to OpenAI said Mr Musk’s bid was “purely a publicity stunt” and not a viable deal for the company.
“If [OpenAI] say ‘it’s a publicity stunt’, we say ‘call our bluff’,” said one person involved in Mr Musk’s bid, which is backed by xAI and partners including Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, 8VC, and Endeavour chief executive Ari Emanuel.
Last month, Mr Toberoff called on the Delaware and California attorneys-general to force OpenAI to launch a competitive auction for the non-profit, which sits at the heart of the company.
OpenAI, which is not entertaining external offers for the non-profit, declined to comment on the bid. A person close to the company previously said Mr Musk’s efforts to force a sale were solely designed to create “more chaos”.
“OpenAI doesn’t have to sell,” said Ann Lipton, a law professor at Tulane University. “The non-profit controls [OpenAI], and until that structure changes, it has obligations as a non-profit to pursue its mission.”
There was “nothing Musk can do but use soft persuasive power”, she added.
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His offer for the non-profit is the latest salvo in a lengthy, bitter rivalry between the Tesla boss and Mr Altman. The former collaborators are now competing to dominate artificial intelligence, raising tens of billions of dollars and building vast data centres. OpenAI is planning to develop $500 billion in AI infrastructure in the coming years through a SoftBank-backed project called Stargate.
OpenAI, a private group that is in talks to raise new capital at a $260 billion pre-money valuation, has no obligation to sell the non-profit.
Separately, as part of OpenAI’s conversion to a for-profit, it had discussed a valuation of about $30 billion for the non-profit entity, according to people with knowledge of the discussion. Musk’s attorneys have argued the figure should be far higher.
A higher valuation would also mean a bigger payout for Mr Musk, whose donation to the company in its early years would be returned many times over. - Copyright The Financial Times Limited 2025
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