Elon Musk and a consortium of investors have made a surprising offer to acquire OpenAI for $97.375 billion. The proposal, described as "serious," aims to direct the entire sum to OpenAI's non-profit arm to further its mission. Musk's consortium, led by x.AI, has pledged to pay the purchase price in full cash. However, Musk's legal team has made it clear that he will withdraw the bid if OpenAI's board commits to maintaining its non-profit status.
Despite the substantial offer, OpenAI's board has yet to formally reject it. The proposal, however, has an expiration date set for May 10, 2025. There are exceptions to this deadline, such as if the deal is finalized earlier, if both parties agree to cease discussions, or if OpenAI formally rejects the offer in writing.
The proposal has attracted attention not only for its financial magnitude but also because the full letter of intent from Musk's team has been made public. The letter argues that OpenAI's non-profit should receive fair market value for its assets, considering what an independent buyer would pay. Additionally, Musk's consortium seeks access to OpenAI's "assets, facilities, equipment, books, and records," along with interviews with OpenAI staff.
The consortium of investors backing Musk includes notable venture capitalists such as Joe Lonsdale's 8VC and Vy Capital, an investor in SpaceX. Despite the heavyweight support behind the offer, OpenAI CEO Sam Altman has dismissed the proposal. Altman's legal team filed a statement on Wednesday, arguing that Musk cannot simultaneously attempt to buy OpenAI's assets and insist on stopping any change in its non-profit status.
In response to the bid, a lawyer representing OpenAI’s board remarked that the proposal "doesn't set a value for [OpenAI’s] non-profit." This highlights a potential sticking point in negotiations, as the board seeks clarity on the valuation attributed to its non-profit side.
Musk’s net worth has seen a significant increase since 2022, estimated at around $400 billion. This financial growth underscores his capacity to make such a large-scale bid. Nonetheless, Musk's conditions for withdrawing his offer add a layer of complexity to the negotiations.
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