Elon Musk’s investment team has proposed to acquire the non-profit organization OpenAI for $97.4 billion. ChatGPT, a chatbot developed by the artificial intelligence startup OpenAI, is the target of this acquisition deal, focusing on the management of the non-profit organization.
Musk’s lawyer, Marc Toberoff, filed a bid for the acquisition of all assets of OpenAI to the Board of Directors on Monday, February 10th. Musk, along with his artificial intelligence startup xAI and an alliance of multiple investment firms, aims to take control of the developer of ChatGPT, OpenAI, and restore its original mission as a non-profit research laboratory for the public good.
The goal of this acquisition, as stated by Toberoff, is to “purchase all assets of the non-profit organization OpenAI, Inc.,” with the raised funds dedicated specifically to advancing OpenAI, Inc.’s original mission for public good.
In a statement, Musk expressed, “It is time to bring OpenAI back to what it used to be, an open-source, safety-oriented force for the public good, and we will ensure that happens.”
However, Sam Altman, the CEO of OpenAI, responded on X platform saying, “No, thank you, but if you’re interested, we will acquire Twitter at a price of $97.4 billion.” Musk replied on X, calling Altman a “fraud.”
The initial report about this bid was first covered by The Wall Street Journal, followed by CNBC, Associated Press, and several other media outlets. Altman and Musk co-founded OpenAI in 2015, operating as a non-profit organization focusing on artificial intelligence research. With the launch of ChatGPT in 2022, OpenAI quickly became a leader in the generative AI field, sparking a wave of investments in the new generation of AI products, services, and infrastructure.
Musk resigned from the OpenAI Board of Directors in 2018, leading to disagreements between him and Altman regarding the company’s direction. In 2019, Musk officially left OpenAI, and Altman took over as CEO. OpenAI underwent restructuring, establishing a for-profit subsidiary while the non-profit parent company remained, serving as the largest shareholder of the subsidiary.
Altman is pushing to transform the subsidiary into a traditional enterprise and separate the non-profit organization, holding the equity of the new for-profit company.
Musk, as a senior advisor to U.S. President Trump, is engaged in fierce legal and public relations battles with Altman, even taking the disputes over OpenAI’s development direction to court.
Musk has filed an application with the court, requesting to prevent OpenAI from transitioning into a for-profit company and questioning its collaboration with Microsoft to consolidate market dominance.
This unsolicited acquisition offer poses a significant challenge to Altman’s carefully planned blueprint for OpenAI, as evaluating a non-profit organization during a transition has been a tricky issue. Musk’s bid sets a high threshold, indicating that he or any individual leading this non-profit organization would ultimately hold a substantial stake in the new OpenAI company, possibly even a controlling interest.
On January 7th, Toberoff sent letters to the Attorney General of California, where OpenAI is headquartered, and the Attorney General of Delaware, where it is registered, requesting a public auction of the company to determine the fair market value of its charitable assets.
Musk and other critics believe that the value of the non-profit organization may be underestimated when OpenAI separates from the non-profit entity.