In a dramatic escalation of tensions within the AI sector, Elon Musk, leading a consortium of investors, has made an unsolicited $97.4 billion bid to acquire OpenAI, the renowned AI research organisation he co-founded. This move intensifies the ongoing rivalry between Musk and OpenAI’s current CEO, Sam Altman.
The unsolicited bid
Musk’s consortium, which includes prominent venture capital firms and his AI company xAI, submitted the substantial offer to OpenAI’s board of directors. The proposal aims to redirect OpenAI towards its original mission of developing AI safely and transparently. Musk has been vocal about his concerns regarding OpenAI’s current trajectory, alleging that the organisation has strayed from its foundational goals and expressing apprehension over its close association with Microsoft.
Sam Altman’s response
Sam Altman swiftly dismissed the bid, responding with a touch of humour. He replied that OpenAI would consider purchasing Twitter (now rebranded as X) for $9.74 billion, referencing Musk’s previous acquisition of the social media platform. This retort underscores the deepening rift between the two tech magnates and highlights the competitive dynamics in the AI industry.
Legal and strategic implications
Musk’s offer complicates OpenAI’s ongoing plans to transition from a nonprofit to a for-profit public benefit corporation. This restructuring is part of Altman’s strategy to raise substantial capital for ambitious projects, including the $500 billion AI infrastructure initiative known as Stargate. Musk has been a vocal critic of this project, accusing OpenAI of collaborating with Microsoft to dominate AI development, which he believes deviates from the organisation’s original nonprofit mission.
The bid also adds complexity to Musk’s legal actions against OpenAI. He has filed lawsuits seeking to prevent the organisation’s transition to a for-profit model, arguing that the nonprofit should be adequately compensated. This legal battle reflects broader concerns about the commercialisation of AI research and the ethical implications of such transformations.
Recent developments and funding
Despite the internal conflicts, OpenAI has made significant strides in recent months. In October 2024, the organisation secured $6.6 billion in funding, elevating its valuation to $157 billion. This influx of capital is intended to accelerate OpenAI’s mission to develop beneficial artificial general intelligence (AGI) for all. The organisation’s flagship tool, ChatGPT, has surpassed 250 million weekly users, assisting with a range of tasks from productivity to creative projects.
Building on this momentum, OpenAI is reportedly in discussions to raise nearly $40 billion in a new investment round, potentially valuing the company at up to $340 billion. SoftBank is expected to lead this round with an investment between $15 billion to $25 billion. The funds are anticipated to support the Stargate project, a collaboration between OpenAI, Oracle, and SoftBank, aimed at strengthening the U.S. position in the AI competition against China.
The road ahead
As OpenAI navigates these developments, it faces the challenge of balancing rapid growth and innovation, such as the launch of Operator, an AI-powered web agent designed to handle online tasks with human-like efficiency. The organisation’s decisions in the coming months will have significant implications for the future of AI research and its role in society. The tech community and stakeholders worldwide are closely monitoring how OpenAI will manage these complex issues and the impact they will have on the broader AI landscape.
