Sam Altman shuts down Elon Musk’s $97 bn bid for OpenAI with a counteroffer

OpenAI CEO Sam Altman on Monday dismissed a $97.4 billion acquisition bid from a consortium led by billionaire Elon Musk, responding with a sharp retort that reignited tensions between the two tech moguls.

The Musk-led group, which includes his artificial intelligence venture xAI, Baron Capital Group, Emanuel Capital, and others, made the offer to acquire the nonprofit entity that controls OpenAI. The bid marks the latest salvo in Musk’s ongoing battle to block OpenAI's transition from a nonprofit to a for-profit company.

Altman, in a post on X, formerly Twitter, swiftly rejected the offer: "no thank you but we will buy twitter for $9.74 billion if you want."

The remark was seen as a direct jab at Musk, who acquired Twitter for $44 billion in 2022.

Musk, the CEO of Tesla and SpaceX, co-founded OpenAI with Altman in 2015 but left the company in 2018. He later filed a lawsuit against OpenAI, Altman, and co-founder Greg Brockman, accusing them of prioritising profit over public good in the development of artificial intelligence.

"It's time for OpenAI to return to the open-source, safety-focused force for good it once was," Musk said in a statement on Monday. "We will make sure that happens."

Legal experts suggest that Musk’s bid could impact OpenAI’s corporate restructuring efforts.

"Musk's bid puts another wrinkle into OpenAI's quest to remove the nonprofit's control over its for-profit entity," Reuters quoted Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits, as saying.

She noted that the offer could set a benchmark for valuing OpenAI’s nonprofit interests.

"If OpenAI values the nonprofit's interests at less than what Musk is offering, then they would have to show why," Loui added.

xAI recently secured $6 billion in funding, valuing the company at $40 billion. A Reuters report suggested that xAI could potentially merge with OpenAI if the deal proceeds.

However, Altman has made it clear internally that OpenAI has no interest in entertaining Musk's "supposed bid," according to a report by The Information.

OpenAI was last valued at $157 billion during a funding round and is reportedly in talks with SoftBank Group for an additional $40 billion round that could push its valuation to $300 billion.

While Musk’s stake in Tesla is valued at approximately $165 billion, financial experts note that his leverage with banks might be limited following his costly Twitter acquisition.