A group of investors led by Elon Musk offered to buy a nonprofit that controls OpenAI for $97.4 billion (about Rs 846,576 crore) and upgraded the Tesla CEO co-founded with him Conflict between AI companies.
Musk said that with the owner’s bid, he hopes to return Openai to “a once an open source, security-focused force”, a statement. In response, OpenAI CEO Sam Altman posted on Musk’s X Social-Media platform: “No, thank you, but if you want, we will buy Twitter for $9.74 billion (approximately Rs 8,46,576 crore) .” (Musk acquired Twitter for $44 billion (about Rs 382,437 crore), but its value later dropped according to external estimates.
The Wall Street Journal reported its first offer. Openai declined to comment.
The journal says the bid was backed by Musk’s own AI startup Xai, which could merge with Openai after the deal. Supporters of other proposals include Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, Joe Lonsdale’s 8VC and Ari Emanuel, according to a statement from attorney Marc Toberoff, representing investors, through its investment funds. Lonsdale declined to comment. The remaining designated investors did not immediately respond to requests for comment.
Rob Rosenberg, founder of Telluride’s legal strategy, said it was difficult to determine how serious Musk’s bid was and what his motivation was. Even if it doesn’t work, Musk’s move could turn Openai’s efforts from becoming a nonprofit entity to a multi-billion-dollar for-profit AI giant, a transformation Musk opposed.
“I think he’s working on making a statement and paying more attention to Openai still in this course, moving from a nonprofit to a for-profit company,” Rosenberg said.
In the statement, Toberoff pointed out one motivation for bidding: to put pressure on external pressure on openai while determining part of its business value while transitioning to a for-profit entity.
“That value cannot be determined by insiders who negotiate on both sides of the same table,” he wrote. “After all, the public is a beneficiary of Openai Inc., and the sweetheart agreement between insiders does not support the public interest.”
Musk and Altman have been in a long dispute over their development direction since their establishment. Musk claims the startup has abandoned all disguise as a charity to benefit humanity with a focus on openness and security. Openai rejected the feature, saying last year that Musk lashed out after earlier attempts to make part of the company his automaker Tesla.
In the decade since Openai was originally a nonprofit (Musk and Altman work together as founders), Openai has received billions of dollars in external investment from Microsoft and others. In a revised version of his lawsuit filed in August, Musk called Openai’s partnership with Microsoft a “monopoly” and the company is “actively trying to eliminate competitors, such as XAI, by extracting from investors without Promising funding to eliminate XAI. “The revised lawsuit lists 26 legal claims and runs 107 pages, while 15 of the original complaints of 83 pages.
Microsoft’s $13 billion (about Rs 113,055 crore) investment in OpenAI has raised concerns from the Federal Trade Commission that the technology giant could expand its advantage in cloud computing to the booming AI market. However, Japanese investment firm Softbank Group is investing as much as US$25 billion (approximately Rs 217,317 crore) in Openai’s investment, a move that has the potential to surpass all other shares and make it Become the biggest supporter of startups. According to Bloomberg, Openai is currently in talks with investors to obtain a valuation of $300 billion (approximately Rs 26054,600 crore).
Last month, Microsoft changed its multi-year deal with OpenAI, where the startup could use rival providers’ cloud computing services as long as the software giant doesn’t want the company itself. The restructuring deal coincides with an announcement from OpenAI, Softbank and Oracle Corp., a new $500 billion (approximately Rs 43,42,565 crore) joint venture to build a cloud computing data center in the U.S. called Stargate.
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