Sam Altman Rejects Elon Musk’s $97 Billion Move Against OpenAI, Makes Savage Counter-offer 

The artificial intelligence arms race has a new twist. In what appears to be both a tactical and symbolic move, Elon Musk and a group of investors offered an eye-popping $97.4 billion to acquire the nonprofit entity that controls OpenAI. The proposal, which was swiftly rejected by OpenAI CEO Sam Altman, highlights the deepening rift between the two tech titans and raises critical questions about AI governance, corporate ethics, and competitive strategy in the sector. 

The Offer That Was Never Meant to Succeed 

At first glance, Musk’s offer seems to be a straightforward attempt to regain influence over OpenAI, the company he co-founded in 2015. However, a closer analysis suggests a more nuanced play at disrupting OpenAI’s transition from a nonprofit to a for-profit model.  

Legally, converting a nonprofit entity into a for-profit corporation is fraught with regulatory hurdles. The nonprofit, OpenAI Inc., still retains significant control over the for-profit arm, OpenAI LP. By making an unsolicited bid at an inflated valuation, Musk is not necessarily seeking ownership but rather complicating Altman’s plans. 

If OpenAI were to sell at this valuation, the nonprofit would hold a controlling stake in the new entity, potentially undermining Altman’s efforts to transform the organization. Moreover, OpenAI’s nonprofit board would be compelled to consider such a high bid, even if the intent behind it is more about obstruction than acquisition. 

Musk’s Legal and Strategic Maneuvering 

Musk’s legal battle with OpenAI underscores his discontent with the company’s deviation from its original open-source and safety-first mission. His lawsuit alleges that OpenAI has become a “closed-source de facto subsidiary” of Microsoft, diverging from its foundational ethos. The bid aligns with this argument: if OpenAI is truly becoming a for-profit entity, Musk argues, it should properly compensate the nonprofit structure it is leaving behind. 

By offering nearly $100 billion—more than double OpenAI’s rumoured valuation in recent investment discussions—Musk has introduced a regulatory roadblock. The valuation argument now shifts, forcing attorneys general in California and Delaware, where OpenAI is registered, to scrutinize the nonprofit’s conversion and demand fair compensation. This effectively slows down Altman’s ambitions while requiring him to source an even larger war chest to keep control. 

The Chessboard: Musk vs. Altman 

Musk’s bid should be seen as a strategic chess move rather than a genuine acquisition attempt. In public markets, control premiums—what buyers pay over the company’s fair value to gain full control—typically range between 20-30% of enterprise value. By inflating OpenAI’s valuation, Musk has forced regulators to reconsider the nonprofit’s stake in the transition, and indeed the company’s valuation itself. 

For Altman, the challenge is now twofold: he must convince investors that OpenAI’s nonprofit transition and his own offer is fair while also ensuring that Microsoft, OpenAI’s largest financial backer, remains on board. Musk has publicly stated that he would outbid any competitor, which means Altman would need to raise well over $100 billion—funds that could otherwise have been used for research and competition with Musk’s own AI company, xAI. 

A Public Spectacle and the Role of Social Media 

The drama played out in real-time on Musk’s own platform, X (formerly Twitter). Altman’s response to the offer—“no thank you but we will buy Twitter for $9.74 billion if you want”—was a pointed jab at Musk’s management of the social media giant. Musk retaliated by calling Altman a “swindler.” 

The exchange underscores the personal nature of this battle. Beyond strategic corporate maneuvers, this is a power struggle between two of the most influential figures in AI. Their rivalry is fueled by ideological differences: Musk envisions AI as an open-source, safety-first initiative, while Altman sees commercial success as integral to AI’s long-term sustainability. 

The Future of OpenAI and the AI Ecosystem 

Musk’s move, whether successful or not, has already shifted the conversation around AI governance. It has reignited concerns about OpenAI’s transformation into a for-profit entity, raising ethical and regulatory questions about whether AI development should be controlled by corporations with financial incentives. 

If regulators take Musk’s valuation argument seriously, OpenAI’s nonprofit entity could retain a majority stake in the for-profit company, disrupting Altman’s efforts to fully commercialize the enterprise. At the same time, if Altman manages to secure new funding to counter Musk’s bid, the battle over OpenAI’s future will only intensify. 

Musk, regardless of the outcome, has achieved one critical objective: throwing a wrench into OpenAI’s transition while reinforcing his position as the primary advocate for open-source AI. Whether this gambit was meant to be a genuine offer or simply a strategic roadblock, it has succeeded in forcing OpenAI into a tighter regulatory corner.