Elon Musk made a bold attempt to acquire OpenAI, the company he co-founded in 2015, with a staggering $97.4 billion offer. 

However, OpenAI CEO Sam Altman swiftly rejected the proposal, responding with a dismissive “no thank you” on X (formerly Twitter). In a sarcastic twist, Altman added that OpenAI would be willing to buy Twitter for $9.74 billion instead.

This rejection is the latest episode in the long-standing feud between Musk and Altman over OpenAI’s direction. 

Musk has openly criticized Altman for steering the company away from its nonprofit, open-source origins. 

His latest bid, backed by his AI startup xAI and a consortium of investors, was a clear attempt to regain control. However, with OpenAI currently valued at over $157 billion, it seems Altman has no intention of letting Musk interfere.

Elon Musk’s Feud with OpenAI and Sam Altman

The tension between Musk and OpenAI dates back to 2018 when Musk left the company due to disagreements over its management and ambitions. 

Originally launched as a nonprofit dedicated to AI safety, OpenAI later transitioned into a for-profit model to secure funding, with Microsoft becoming its largest investor.

Musk has long criticized this shift, arguing that OpenAI is straying from its original mission. He even filed a lawsuit against OpenAI and Altman, accusing them of violating the firm’s foundational principles. 

According to Musk, OpenAI should return to its roots as an open-source AI research entity rather than prioritizing commercial gains.

His latest bid to buy OpenAI outright was seen as an aggressive move to halt the company’s transition into a for-profit powerhouse. 

^{Source: Twitter (X)}

The offer was reportedly backed by major investors, including Baron Capital, Vy Capital, and 8VC. However, Altman and OpenAI’s leadership have remained firm in their plans, showing no interest in Musk’s proposal.

Why Sam Altman Rejected Musk’s $97.4 Billion Offer

While Musk’s offer was substantial, several factors contributed to Altman’s outright rejection:

1. OpenAI’s Financial Growth and Strategic Partnerships

OpenAI has grown rapidly, securing billions in funding and forming strategic partnerships. Microsoft’s involvement alone has significantly boosted its valuation and infrastructure, making a Musk buyout seem unnecessary.

2. Commitment to OpenAI’s Future Vision

Under Altman’s leadership, OpenAI has steadily shifted towards a for-profit model to sustain its expensive AI research. Selling to Musk would likely disrupt this vision, especially given Musk’s history of advocating for open-source AI models.

3. Musk’s Ongoing Lawsuit Against OpenAI

Given Musk’s legal battle against OpenAI, accepting his offer would have been contradictory. Altman and the board likely saw Musk’s bid as a hostile takeover attempt rather than a genuine business proposition.

4. Public and Private Jabs Between Musk and Altman

The rivalry between the two executives has become increasingly public. Musk frequently criticizes Altman on X, even referring to him as “Scam Altman” after the bid was rejected. With tensions this high, collaboration seems highly unlikely.

What’s Next for OpenAI and Elon Musk?

Despite the rejection, Musk isn’t backing down. His attorney, Marc Toberoff, stated that Musk’s group is willing to match or exceed any higher bids. This suggests that Musk may attempt further negotiations or even escalate his legal action against OpenAI.

Read more: The Connection Between Elon Musk and XRP

Meanwhile, OpenAI is moving forward with its plans. The company is involved in the massive $500 billion AI infrastructure investment project Stargate, which is backed by private investors and the U.S. government. 

Additionally, OpenAI is in talks with SoftBank about a potential $40 billion deal, which would further strengthen its financial position.

Musk’s own AI company, xAI, continues to develop its ChatGPT rival, Grok, which is integrated into X. 

While xAI has attracted interest, it currently lacks the market dominance that OpenAI enjoys. This failed acquisition attempt may push Musk to double down on growing xAI as a direct competitor.

Conclusion

Elon Musk’s $97.4 billion bid to acquire OpenAI was met with a swift and sarcastic rejection from Sam Altman, highlighting the deep divide between the two tech giants. 

With Musk determined to bring OpenAI back to its nonprofit origins and Altman focused on scaling it into a global AI leader, this rivalry is far from over.

While OpenAI continues to solidify its for-profit status with major investments, Musk’s xAI will likely push forward in an attempt to challenge OpenAI’s dominance. 

Whether through legal battles, competitive AI models, or future buyout attempts, Musk seems determined to remain a central figure in the AI industry.

Frequently Asked Questions

1. Why did Elon Musk want to buy OpenAI?

Elon Musk has been critical of OpenAI’s shift from a nonprofit to a for-profit entity. He aimed to regain control and steer it back toward open-source AI development.

2. Why did Sam Altman reject Musk’s offer?

Altman and OpenAI’s board see no reason to sell, given the company’s strong financial standing and strategic partnerships. Additionally, their vision for OpenAI differs greatly from Musk’s.

3. What does this mean for OpenAI’s future?

OpenAI will continue its transition into a for-profit company with ongoing investments and partnerships, particularly with Microsoft. Musk’s rejection may push him to grow his own AI company, xAI, instead.

Investor Caution 

While the crypto hype has been exciting, remember that the crypto space can be volatile. Always conduct your research, assess your risk tolerance, and consider the long-term potential of any investment.

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