Elon Musk and OpenAI Bid War: Will His 93.4 Billion Bid Absorb the AI Giant into His Tech Empire?

Elon Musk’s pursuit of acquiring OpenAI this year by filing lawsuits and starting a bid (Photo: Allison Robbert/Zuma Press)

On Feb 10, Elon Musk, who acquired X (formerly Twitter) in 2022, made a $93.4 billion bid to acquire OpenAI, a company he co-founded with Sam Altman in 2015. The offer, if accepted, would give Musk control over the artificial intelligence company known for developing ChatGPT.

OpenAI, originally founded as a nonprofit research organization, transitioned into a for-profit subsidiary in 2019 to attract investment, including funding from Microsoft. Musk has been a vocal critic of this shift, arguing that OpenAI should adhere to its initial mission of developing AI for the benefit of humanity rather than financial gain.

In 2018, Musk departed from OpenAI due to differences in vision regarding the company's future. Since then, Altman has led the organization, overseeing its transition to a for-profit model that has enabled significant investments in AI technology.

Musk later founded his own artificial intelligence company, xAI, in 2023, positioning it as a competitor to OpenAI. His bid to reacquire OpenAI follows previous legal disputes, including a lawsuit he filed in 2024, alleging that the company had deviated from its nonprofit mission and was prioritizing financial interests. According to a complaint Musk filed, “Microsoft and OpenAI, apparently unsatisfied with their monopoly, or near so, in generative artificial intelligence, are now actively trying to eliminate competitors, such as xAI, by extracting promises from investors not to fund them.”

Altman has rejected Musk’s offer, responding on X with, “No thank you, but we will buy Twitter for $9.74 billion if you want.” The rejection continues an ongoing dispute between the two executives, which began following Musk’s departure from OpenAI in 2018.

To separate from the company’s nonprofit board, Altman must provide compensation during the transition. However, Musk’s bid for the nonprofit’s assets significantly drove up the cost, making the compensation far more expensive for Altman and his investors.

Sam Altman, CEO of OpenAI, rejects Elon Musk’s 93.4 billion offer to purchase the non-profit assets of OpenAI (Photo: Aurelien Morissard / NYTimes)

Musk’s reasons for seeking control of OpenAI remain a topic of debate. While he has framed the bid as an effort to uphold OpenAI’s original nonprofit mission, critics suggest it could also be a strategic move to slow OpenAI’s progress and strengthen xAI’s market position. As of December 2024, Musk has raised approximately $6 billion for xAI.

If successful, Musk’s acquisition of OpenAI would significantly reshape the AI industry, impacting major investors such as Microsoft, Nvidia, Thrive Capital, Khosla Ventures, Altimeter Capital, and Fidelity. However, OpenAI’s board rejected the offer on Feb. 14, leaving the company’s future direction and the ongoing rivalry between Musk and Altman unresolved.