Elon Musk and a group of investors, including x.AI, have proposed a $97.4 billion all-cash offer to acquire OpenAI. The bid, however, has been dismissed by OpenAI CEO Sam Altman, who argues that Musk is contradicting himself by trying to acquire OpenAI while also suing to prevent its shift from a nonprofit.
Musk’s legal team responded by stating that they would withdraw the offer if OpenAI remains a nonprofit. Although Altman publicly dismissed the bid, OpenAI’s board has yet to formally reject it, as they are legally required to evaluate such offers.
The deal includes provisions for Musk’s group to conduct due diligence, which would give them access to OpenAI’s financial records and key personnel. While this is common in major acquisitions, it could potentially provide Musk’s competing AI company, x.AI, with sensitive business insights. The offer also sets a deadline of May 10, 2025, unless OpenAI rejects it in writing or discussions end earlier.
Musk’s consortium, which includes investors from 8VC and Vy Capital, has clarified that the entire sum would be paid in cash. This is notable given Musk’s history of leveraging debt, such as when he borrowed $13 billion to acquire Twitter (now X) in 2022. Despite his net worth exceeding $400 billion, the letter of intent suggests that multiple investors, beyond the named seven, are contributing to the deal rather than Musk financing it alone.
Legal filings reveal that OpenAI believes Musk’s offer undermines his lawsuit, which claims OpenAI’s assets cannot be privatized. OpenAI’s board has questioned the seriousness of the offer, suggesting it might be a strategy to raise the price of taking the company private.
Musk’s team insists the bid is genuine, arguing that if OpenAI were to be sold, it should receive fair market value. Despite the ongoing legal battle, OpenAI has reaffirmed that its nonprofit entity is not for sale.
