Elon Musk’s recent unsolicited bid to purchase OpenAI for $97.4 billion—a deal quickly rejected by OpenAI CEO Sam Altman—has brought renewed attention to the long-standing feud between the two former friends and collaborators. The tension between Musk and Altman dates back to the founding of OpenAI in 2015, when they, along with other Silicon Valley entrepreneurs, established the company with the idealistic goal of ensuring that artificial general intelligence (AGI) benefits humanity as a whole. However, this partnership was short-lived. By 2018, Musk left OpenAI after a power struggle, with the company later revealing that Musk had wanted to merge OpenAI with Tesla or gain full control. When this demand was refused, Musk departed acrimoniously, taking with him a promised $1 billion donation.
The split between Musk and OpenAI was not just about control; it also revolved around differing visions for the company’s future. Musk had suggested treating Tesla as a “cash cow” to fund OpenAI’s operations, arguing that this was necessary to compete with Google’s DeepMind project. However, when Altman and the rest of the team refused to hand over control, OpenAI decided to explore other avenues for funding. In response, Altman established a “capped-profit” subsidiary, securing investments from Microsoft and other backers. Musk, unhappy with this direction, retaliated by founding his own AI company, xAI, and suing OpenAI for breach of contract. He accused the company of becoming a “closed-source de facto subsidiary” of Microsoft, prioritizing profits over its original mission to benefit humanity. OpenAI denied these allegations, stating that it had never promised to open-source its technology, only to share its benefits widely.
The conflict escalated further when rumors emerged in 2024 that Altman planned to transform OpenAI into a for-profit company. Despite Musk’s legal attempts to block this move, Altman proceeded with his plans, announcing in December that OpenAI’s for-profit arm would take control to “raise the necessary capital” needed to achieve AGI. The non-profit side of the company would continue to focus on AI for the public good. To facilitate this shift, OpenAI’s board began the complex process of valuing parts of the company, with Altman poised to buy the company from the non-profit, which is currently estimated to be worth around $40 billion.
Musk’s $97.4 billion bid has thrown a wrench into these plans, raising questions about the implications of such a acquisition. Legal and corporate governance experts, such as Yale professor Jonathan Macey, have noted that OpenAI may not be able to ignore the offer, especially given the credible investors backing it, including Ari Emanuel, CEO of Endeavour, and other investment groups. However, others speculate that Musk’s move may be partially a tactic to disrupt Altman’s plans or to influence the company’s valuation. Dan Primack, business editor at Axios, suggested on X that Musk’s offer could be both a troll and an attempt to set a higher price for Altman to pay.
Despite the uncertainty surrounding Musk’s intentions, Altman remains resolute. Speaking to Sky News from an AI summit in Paris, he reiterated that OpenAI is “not for sale” and that the company’s mission remains its top priority. He emphasized that the board would decide how to proceed, but the focus would remain on preserving the company’s mission. This stance reflects Altman’s commitment to OpenAI’s original vision, even as the company navigates the complexities of its for-profit transition.
The potential consequences of Musk’s bid extend beyond the business realm, raising concerns about the concentration of power in the tech industry. Sherif Elsayed-Ali, executive director of the Future of Technology Institute, highlighted the risks of Musk gaining control of OpenAI, particularly given his existing influence over other companies like X. Such a consolidation of power could have significant implications, not just for the development of AGI, but also for the political and social landscape. As the situation unfolds, one thing is clear: the battle between Musk and Altman is about more than just money—it’s about the future of AI and who gets to shape it.
