Elon Musk’s $97.4 Billion Bid for OpenAI: Key Insights
Last week, a coalition led by Elon Musk’s x.AI tabled a remarkable offer of $97.4 billion to purchase OpenAI. OpenAI’s CEO, Sam Altman, has publicly rejected the proposal, suggesting that Musk’s intention is to hinder the company’s transition from a non-profit model, an outcome Musk is also contesting in court.
Investors Behind the Bid
Musk’s consortium includes prominent venture capitalists like Joe Lonsdale from 8VC and SpaceX investor Vy Capital. The offer is structured as an all-cash transaction, a departure from Musk’s previous financing strategies that heavily relied on loans, such as the $13 billion borrowed to acquire Twitter (now X).
Details from Musk’s Proposal
Musk’s attempt comes with a clear deadline: May 10, 2025. This expiration date would become moot if the parties reach an agreement sooner, OpenAI formally rejects the bid, or the discussions are mutually terminated. Despite Altman’s dismissive comments, including a humorous counteroffer to acquire Musk’s platform for a fraction of the price, OpenAI has yet to formally reject the bid as it must conduct a legal assessment of such offers.
Due Diligence and Potential Conflicts
Access to OpenAI’s Operations
As part of the acquisition process, Musk’s team seeks extensive due diligence, which includes access to OpenAI’s financial records and personnel for interviews. This practice is standard but poses potential competitive risks, as it could grant Musk’s firm insights into the inner workings of OpenAI.
Legal Implications of the Offer
The plan to acquire OpenAI seems contradictory to Musk’s ongoing legal claims that the assets of the company should not be transferred for private interests. OpenAI’s legal team asserts that the bid appears insincere, while Musk’s side argues it is a legitimate offer designed to benefit OpenAI’s non-profit mission.
Future of the Acquisition Bid
Conditions for Withdrawal
Musk’s representatives have indicated that the acquisition bid would be revoked if OpenAI maintains its non-profit status. According to legal filings, Musk’s intention is to provide fair market value for OpenAI’s assets, which some analysts argue could put pressure on Altman to reassess the company’s valuation in any future privatization efforts.
OpenAI’s legal counsel has stated that Musk’s offer fails to fairly appraise the organization’s non-profit status, emphasizing that OpenAI itself is “not for sale.”