Elon Musk’s x.AI, leading a group of investors, has made a staggering $97.4 billion offer to acquire OpenAI, the company behind ChatGPT. This unsolicited bid has been met with resistance from OpenAI CEO Sam Altman, who has publicly dismissed the proposal.
The offer comes amidst a legal battle where Musk is attempting to block OpenAI’s transition from a non-profit to a for-profit entity. Altman’s legal team argues that Musk cannot simultaneously pursue the acquisition of OpenAI’s assets and challenge its non-profit status. Musk’s team has countered by stating they will withdraw the bid if OpenAI abandons its plans for for-profit conversion.
The offer letter specifies a deadline of May 10, 2025, for acceptance, with certain exceptions. Despite Altman’s dismissive public comments, OpenAI’s board has yet to formally reject the offer, as they are legally obligated to evaluate such proposals. Musk’s consortium, which includes investors like Joe Lonsdale’s 8VC and Vy Capital, proposes an all-cash transaction of $97.375 billion. This is noteworthy given Musk’s past reliance on debt financing, as seen in his acquisition of Twitter. The letter identifies seven investors, including x.AI, and mentions “others.”
A standard due diligence clause in the offer letter grants the buyers access to OpenAI’s financial records, business operations, and personnel for interviews. This access, while typical for such a large acquisition, could provide Musk’s x.AI, a direct competitor of OpenAI, with valuable internal information. The offer itself presents a contradiction to Musk’s legal arguments that OpenAI’s assets cannot be transferred for private use, as argued by OpenAI’s legal team. They suggest the bid is not serious but rather an attempt to undermine a competitor.
Musk’s legal team has indicated that he will withdraw the acquisition bid if OpenAI’s board commits to remaining a non-profit.
