Elon Musk has made an unsolicited $97.4 billion offer to acquire OpenAI’s nonprofit arm, a move that could significantly impact the company’s transition to a for-profit structure. OpenAI CEO Sam Altman quickly rejected the bid, mocking Musk in a social media post.
However, legal experts suggest the offer complicates OpenAI’s plans, as the board must now justify rejecting a high-value proposal while ensuring compliance with fiduciary obligations. OpenAI originally operated as a nonprofit before adopting a capped-profit model in 2019, and it is now shifting to a public benefit corporation to attract more funding.
Musk’s bid could stall this transition, as regulatory authorities in California and Delaware have requested more information about OpenAI’s restructuring. Analysts believe Musk’s legal tactics, including his ongoing lawsuit against OpenAI, aim to pressure the company and raise its valuation.
OpenAI is preparing for a funding round that could value its for-profit arm at $260 billion, with its nonprofit expected to hold a 25% stake. Musk’s offer signals that investors may be willing to pay a premium for OpenAI’s nonprofit, potentially complicating its corporate restructuring. OpenAI’s board, however, has grounds to reject the offer, citing concerns over Musk’s intent, funding credibility, and the company’s long-term mission.
Experts argue that OpenAI may use its legal authority to block the bid as a hostile takeover attempt. Furthermore, Musk’s wealth is largely tied to Tesla stock, making it unclear whether he can independently finance the deal. While OpenAI’s board is expected to stand with Altman, Musk’s bid has already influenced market perceptions, possibly forcing OpenAI to secure more funding and navigate additional regulatory scrutiny.
