OpenAI CEO Rejects Elon Musk's $97.4 Billion Offer
In a surprising move, OpenAI CEO Sam Altman has rejected an unsolicited $97.4 billion offer from a group of investors led by Elon Musk to acquire the nonprofit research organization. The offer, which represents a significant reduction in OpenAI's valuation, was reportedly made on Monday.
SoftBank's Plans and Altman's Response
CNBC reports that SoftBank intends to invest $40 billion in OpenAI at a valuation of $260 billion. In response to Musk's offer, Altman posted a statement on the social media platform X, saying, "No thank you, but we will buy Twitter for $9.74 billion if you want."
Musk swiftly responded, calling Altman a "swindler." Musk acquired X, formerly known as Twitter, in 2022 for $44 billion.
Musk and Altman's History with OpenAI
Musk and Altman co-founded OpenAI in 2015 as a nonprofit, but Musk later distanced himself over strategic disagreements. OpenAI has since partnered with Microsoft, who invested heavily in the company and gained access to its AI models.
Legal Challenges and Fair Market Value
Altman plans to transform OpenAI into a for-profit enterprise, but Musk has filed a lawsuit to prevent it. The lawsuit stems from Musk's initial $45 million donation to OpenAI, which he claims was contingent on the organization remaining nonprofit. Legal experts emphasize that OpenAI is legally obligated to receive fair market value for its assets.
Musk's Rival AI Venture and Public Sparring
Musk also operates xAI, an OpenAI competitor. The duo has publicly clashed before. Musk previously alleged that OpenAI, SoftBank, and Oracle lacked the funds for their Stargate Project, an ambitious data center initiative.
Altman refuted these claims, inviting Musk to visit a project facility under construction.
Conclusion
Musk's $97.4 billion offer could potentially establish a baseline value for OpenAI. However, legal and financial experts caution that the organization's growth potential, debt, and ongoing litigation could significantly influence its valuation.