Elon Musk’s $97.4B Bid for OpenAI’s Nonprofit Arm: A High-Stakes Power Struggle in AI

 

Elon Musk’s $97.4B Bid for OpenAI’s Nonprofit Arm: A High-Stakes Power Struggle in AI



The rivalry between two of the tech industry's most prominent figures, Elon Musk and Sam Altman, has reached a new peak. Musk, alongside a coalition of investors, has made an unsolicited $97.4 billion bid to take control of OpenAI’s nonprofit arm. This bold move not only intensifies the ongoing feud between Musk and OpenAI’s leadership but also raises questions about the future direction of AI research and commercialization.

The Bid and Its Backers

The offer, submitted by Musk’s attorney, is backed by major investment firms, including his own AI venture, xAI, along with Valor Equity Partners, Baron Capital, and other private investors. The bid arrives at a pivotal moment for OpenAI, which is currently transitioning from a nonprofit research lab to a for-profit entity, with SoftBank reportedly eyeing a $40 billion investment at a staggering $260 billion valuation.

Musk, a co-founder of OpenAI who parted ways with the organization in 2018, has been vocal about his concerns regarding its current trajectory. His primary argument is that OpenAI has deviated from its original mission of open-source AI development and has instead become a closed, profit-driven entity. If successful, Musk aims to restore OpenAI’s commitment to transparency and public accessibility—an approach that would fundamentally alter the company’s business strategy.

Altman vs. Musk: The AI Feud Escalates

Unsurprisingly, OpenAI CEO Sam Altman did not take the offer seriously. Responding on X (formerly Twitter), Altman sarcastically proposed to "buy Twitter for $9.74B" in return—a jab at Musk's tumultuous management of the platform. Musk fired back, branding Altman a "swindler" and further fueling the public spectacle of their ongoing dispute.

This is not the first time Musk and Altman have clashed. Musk has repeatedly criticized OpenAI for what he perceives as a betrayal of its founding principles, while Altman has dismissed Musk’s concerns as self-serving. Their feud has played out across legal disputes, social media jabs, and competing AI ventures, with Musk’s xAI emerging as a direct competitor to OpenAI.

Why This Matters

The implications of Musk’s bid extend far beyond personal rivalries. Here’s why this development is crucial:

1. The Future of AI Governance

If Musk succeeds, OpenAI could shift back toward an open-source model, allowing wider access to its AI advancements. While this could democratize AI technology, it also raises concerns about security, regulation, and ethical misuse. The balance between innovation and responsible AI development remains a contentious issue.

2. Investor Influence and AI Commercialization

With OpenAI securing major investments from tech giants like Microsoft and potential funding from SoftBank, its transition into a corporate powerhouse is well underway. Musk’s bid challenges this trajectory and could reshape how investors engage with AI firms—particularly regarding control, transparency, and profit motives.

3. The Musk-Altman Showdown and Market Disruption

The power struggle between these two tech moguls isn't just about business—it’s about vision. Musk advocates for open AI development, while Altman is steering OpenAI toward a more closed, structured approach with corporate backing. This ideological divide could shape the AI industry’s future, influencing regulations, competition, and technological progress.

What’s Next?

At this stage, it is highly unlikely that OpenAI’s board will accept Musk’s offer. However, given his financial resources and determination, Musk could pursue alternative routes, such as legal challenges, strategic partnerships, or even the expansion of xAI to rival OpenAI directly.

With both Musk and Altman playing critical roles in AI development and U.S. government tech initiatives, this conflict isn’t just about corporate control—it’s about shaping the next era of artificial intelligence. Whether this is just another chapter in their ongoing feud or a pivotal moment in AI history remains to be seen.

One thing is certain: the battle for AI dominance is far from over.

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