OpenAI boss Sam Altman has rejected a $97.4 billion bid from a consortium of investors led by his billionaire rival Elon Musk.
The offered aimed to buy all the assets of the AI giant, which makes ChatGPT.
Musk and Altman are currently embroiled in a long-running legal dispute over the company, which Musk helped start, and its future direction.
The Bid and Rejection
Altman made his feelings clear on Musk’s social media platform, X, saying:
“No thank you but we will buy Twitter for $9.74 billion if you want.”
However, this playful rejection has not necessarily put an end to the proposed acquisition.
The decision now lies with OpenAI’s board, which may still consider the offer, especially if the price increases.
While Altman’s rejection is firm, questions linger about the seriousness of Musk’s offer and whether it is a tactical move in the ongoing legal battle between the two men.
The Roots of Tension Between Musk and Altman
Musk and Altman co-founded OpenAI as a non-profit organization, aiming to develop AI for the benefit of humanity. However, the relationship began to sour when Musk left the company in 2018. Since then, tensions have been rising.
Musk’s Criticism
Musk has criticized OpenAI’s transition from a non-profit to a for-profit entity.
He argues this shift betrays the company’s founding mission, which he believes was to develop AI for public good. Musk is also vocal about his concerns that OpenAI’s new structure prioritizes profits over humanity.
Altman’s Justification
Altman, on the other hand, argues that the for-profit model is necessary to fund the development of cutting-edge AI technologies.
The company’s shift is seen as a way to secure the resources required to compete with other major tech players in the field.
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Skepticism Around Musk’s Motives
Tech investor Christie Pitts, based in San Francisco, voiced doubts about Musk’s intentions.
Given that Musk has his own for-profit AI company, she suspects that his bid might not be entirely about acquiring OpenAI but could be part of a larger strategy.
She told the BBC:
“I think it’s fair to be pretty suspicious of this considering that he has a competitor himself,” Pitts said in an interview.
“There’s more than meets the eye here.”
The Valuation and Future Prospects
Musk’s offer of $97.4 billion is considerably lower than the $157 billion valuation OpenAI received in its last funding round in October 2024.
Current reports suggest that the company could now be worth around $300 billion.
Despite Musk’s offer, the possibility remains that OpenAI may entertain higher bids, especially if the consortium is willing to increase their offer.
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What’s Next for OpenAI?
While Musk’s legal disputes with Altman continue to unfold, OpenAI is also making significant moves in AI infrastructure.
The company is partnering with Oracle, a major US tech giant, along with a Japanese investment firm and an Emirati sovereign wealth fund to build $500 billion worth of AI infrastructure in the US.
This ambitious project, known as The Stargate Project, was announced at the White House and touted as the largest AI infrastructure effort in history.
Musk’s Criticism of Stargate
Despite his involvement with The Stargate Project, Musk has questioned whether the pledged funding is genuine.
He claims the project doesn’t “actually have the money” it claims to invest, although he has not provided evidence to support his statement.
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The Future of OpenAI and Musk’s Role
As the rivalry between Musk and Altman heats up, many are wondering about the long-term future of OpenAI and its position in the rapidly expanding AI market.
Will Musk succeed in his bid, or will Altman continue to steer the company towards its ambitious goals?
Takeaways:
- Musk has tabled a bid to take over OpenAI, but Altman rejected it.
- Musk’s motives are questioned, as he has his own competing AI venture.
- OpenAI’s valuation has soared, but it remains to be seen if the board will entertain further offers.
- The future of OpenAI’s AI development may hinge on its ability to secure funding and navigate these internal power struggles.
