Elon Musk Proposes to Buy OpenAI for Nearly $100 Billion
Billionaire Elon Musk, co-founder of OpenAI, has reportedly led a group of investors proposing to purchase the nonprofit organization controlling OpenAI for $97.4 billion. The proposal was submitted to OpenAI’s board on February 10, 2025, according to The Wall Street Journal. This move marks a major turning point in Musk’s relationship with OpenAI and further complicates CEO Sam Altman’s efforts to transition OpenAI into a fully for-profit entity.
Elon Musk’s Relationship with OpenAI
Elon Musk, along with Sam Altman and several AI researchers, founded OpenAI in 2015 with the mission of developing safe and beneficial artificial intelligence (AI) for humanity. Initially, OpenAI operated as a nonprofit organization, ensuring that AI advancements were widely shared and not controlled by corporations or governments.
However, in 2018, Musk stepped down from OpenAI’s leadership due to a conflict of interest with Tesla, which was expanding its AI efforts through its Autopilot self-driving system. After Musk’s departure, OpenAI shifted its operational model, establishing a for-profit subsidiary in 2019 to attract investment and accelerate research. This shift created friction between Musk and Altman, as Musk believed that OpenAI had deviated from its original mission.
Musk’s Proposal to Acquire OpenAI
According to Financial Times, Musk’s buyout offer for OpenAI is backed by his AI company, xAI, alongside several venture capital firms and private investors. Musk aims to return OpenAI to its original mission as an open-source and AI safety-focused organization.
Musk’s attorney, Marc Toberoff, emphasized that if Altman and OpenAI’s board intend to fully transition into a for-profit company, then the nonprofit organization should be fairly compensated for relinquishing control over such a transformative technology.
OpenAI and Sam Altman’s Response
OpenAI CEO Sam Altman quickly rejected Musk’s proposal. According to The Scottish Sun, Altman responded by offering to buy Twitter (now X) for $9.74 billion, referencing Musk’s 2022 acquisition of the platform. This response underscores the growing tensions between the former co-founders, who have conflicting visions for OpenAI’s future.
A source close to OpenAI stated that Musk’s push for OpenAI’s sale is merely an attempt to create further disruption. OpenAI maintains that it has no obligation to sell and is committed to continuing its original mission.
Legal Disputes Between Musk and OpenAI
In August 2024, Musk filed a lawsuit against OpenAI, alleging that the company abandoned its founding principles by prioritizing profit maximization over its nonprofit mission. Musk also accused OpenAI of extortion-like tactics and claimed that the company had betrayed its foundational commitments.
OpenAI, in response, dismissed Musk’s lawsuit, arguing that he was merely jealous because he was no longer involved with the company after stepping down in 2018. The company also defended its for-profit transition, asserting that it was necessary to attract investment and develop cutting-edge AI technologies.
Implications for the AI Industry
Musk’s bid to acquire OpenAI comes amid fierce competition in the AI sector. OpenAI has made significant advancements with its large language models like GPT and applications such as ChatGPT, attracting global attention. Musk’s involvement through xAI has further intensified competition in the field.
According to Wikipedia, OpenAI partners with Microsoft, which has invested around $13 billion and holds approximately 49% of OpenAI’s shares. This partnership provides OpenAI with substantial computing resources via Microsoft Azure, allowing the company to push forward with AI research and development.
Conclusion
Elon Musk’s $97.4 billion offer to acquire OpenAI marks a new chapter in his complex relationship with the company he co-founded. While Altman and OpenAI’s board have rejected the proposal, the bid highlights a fundamental disagreement between Musk and Altman regarding AI’s future and ethical considerations.
While Musk aims to restore OpenAI’s nonprofit ideals, Altman and his team believe that a for-profit model is essential for continued AI advancements.
This event also underscores the delicate balance between profit-driven AI development and the need for ethical AI governance, ensuring that AI progress benefits society rather than being exclusively controlled by corporations.
