Musk vs OpenAI

Key Takeaways

• Musk’s $97.4B Bid – Challenges OpenAI’s control, escalating his feud with Altman.
• Funding Disruption – Complicates OpenAI’s $300B valuation and $40B SoftBank deal.
• Regulatory & Political Impact – Triggers legal scrutiny and intensifies AI rivalry.

Elon Musk’s $97.4 Billion Bid for OpenAI Sparks Power Struggle

Elon Musk, alongside investors including Vy Capital and his AI company xAI, has launched a $97.4 billion bid to acquire the nonprofit that controls OpenAI, intensifying his long-running feud with OpenAI CEO Sam Altman. Other backers include Hollywood power broker Ari Emanuel. Altman swiftly dismissed the offer, jokingly suggesting OpenAI could instead buy X (formerly Twitter) for $9.74 billion—prompting Musk to call him a “swindler.”

The bid comes as OpenAI is in the process of raising $40 billion from SoftBank, valuing the company at $300 billion. This funding would solidify OpenAI as one of the most valuable private companies. However, Musk’s offer complicates OpenAI’s transition to a fully for-profit structure. Since the nonprofit legally controls the company, OpenAI would need to compensate it to complete the shift—Musk’s bid signals that valuation should be far higher than previously estimated.                                                                        

Regulatory, Legal, and Political Implications

Musk’s bid puts pressure on OpenAI’s board to secure fair market value for its assets, potentially inviting scrutiny from regulators overseeing charitable organizations. State charity regulators in Delaware and California are already examining OpenAI’s structural shift.

Beyond business, the bid highlights Musk’s broader ambitions in AI. Since founding xAI in 2023, he has sought to compete directly with OpenAI, though Altman has maintained an edge, particularly in Washington. Recently, Altman secured support from former President Trump for a $100 billion AI infrastructure initiative led by OpenAI, SoftBank, and Oracle. Meanwhile, Musk’s growing influence in political and tech circles positions him as a key player in the future of AI. Whether Musk’s bid succeeds or not, it threatens to disrupt OpenAI’s trajectory and reshape the AI industry.