Key Points
Musk proposes $97.4B OpenAI acquisition
Potential deal could disrupt SoftBank funding round
Historical tension between Musk and Altman continues
In response, OpenAI CEO Sam Altman took a jibe at the offer on X (formerly Twitter), saying, "No thank you but we will buy Twitter for $9.74 billion if you want."
https://x.com/sama/status/1889059531625464090
The latest development marks Musk's latest challenge to OpenAI, an organisation he helped establish nearly a decade ago.
The consortium includes Vy Capital and Xai, Musk's artificial intelligence company, as well as the Hollywood power broker Ari Emanuel and other investors, according to sources who requested anonymity due to the ongoing negotiations. The Wall Street Journal had earlier reported news of the offer,
The New York Times reported citing a person familiar with OpenAI's potential response that the company has not yet seen Musk's bid. This unsolicited offer could disrupt OpenAI's efforts to finalise a USD 40 billion funding deal, which would significantly increase the company's valuation from just four months ago.
The new funding round, led by the Japanese conglomerate SoftBank, is expected to value OpenAI at USD 300 billion, according to three sources familiar with the deal who spoke on the condition of anonymity.
If completed, this deal would place OpenAI among the most valuable private companies globally, alongside Musk's SpaceX and ByteDance, the parent company of TikTok, according to The New York Times.
Notably, Musk and Altman have been at loggerheads for quite some time.
In August last year, Musk filed a lawsuit accusing OpenAI of putting profits before its initial nonprofit mission of advancing AI in a way that benefits all of humanity.
This month, a United States federal judge has said that parts of Elon Musk's lawsuit against OpenAI to halt its conversion to a for-profit entity might go to trial, adding that the Tesla CEO will have to appear in court and testify, Al Jazeera reported.
It is, however, pertinent to note that Musk co-founded OpenAI with Altman in 2015 but left before the company took off and subsequently founded the competing AI startup xAI in 2023.
Notably, the two tech entreprenuers have been engaging in feuds lately.
Just in the first week of his presidency, Donald Trump open announced a joint venture, Stargate, that would invest around USD 500 billion in AI infrastructure via a partnership between OpenAI, Oracle (ORCL), and SoftBank (SFTBY).
The move drew criticism from Elon Musk who claimed, "They don't actually have the money."
Altman to Musk calling him "wrong" and invited Musk to visit an AI development site in Texas. Calling Trump's announcement 'great' for the country, Altman also affirmed that in his "new role" Musk needs to put "America first"
"This is great for the country. i realize what is great for the country isn't always what's optimal for your companies, but in your new role i hope you'll mostly put [America] first," Altman wrote, attaching an American flag emoji.
