Elon Musk has led a group of investors and proposed $97.4 billion for the nonprofit organization that oversees OpenAI—the company that developed ChatGPT. This was reported by Bloomberg.

If the deal succeeds, Musk's company xAI could merge with OpenAI. The investor group also includes Baron Capital Group and Emanuel Capital.

However, the offer was met with a sharp rejection from OpenAI's CEO Sam Altman, who ironically responded on X (formerly Twitter): “Thanks, but no. However, we are ready to buy Twitter for $9.74 billion, if you want.”

In response, the founder of SpaceX and Tesla labeled Sam Altman a “fraud.”

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Ed Rosenberg, managing partner at Theorem LP, believes Musk is “trying to make a statement and draw attention to the fact that OpenAI continues its shift from a nonprofit organization to a commercial enterprise.”

Musk vs Altman

Elon Musk was one of the co-founders of OpenAI in 2015 but later left the project due to disagreements over its development strategy. In March 2024, he filed a lawsuit against OpenAI and Sam Altman, claiming that the company violated its original commitments and became a commercial entity controlled by Microsoft.

“OpenAI was created as an open-source company (that's why I named it Open AI) and a nonprofit organization to counter Google, but now it has turned into a closed, profit-maximizing company effectively controlled by Microsoft. This is not at all what I originally envisioned,” Musk commented.

OpenAI noted that Musk had inspired “deep admiration” and motivated the team to achieve great things. However, according to the management, the billionaire initially predicted the project's quick failure, then created a competitor, and is now attempting to sue his former partners.

The company stated that the billionaire also proposed joining Tesla for funding.

OpenAI was initially a nonprofit organization, but in 2019 it established the commercial entity OpenAI LP. Control remains with the nonprofit parent organization, which Musk attempted to acquire.

This allowed OpenAI to attract over $10 billion in investments from Microsoft, which received:

  • exclusive access to OpenAI's AI models;
  • status as the company's primary cloud provider.

Amid plans for OpenAI to become a commercial company, the chief technology officer Mira Murati, chief scientist Bob McGrew, and vice president of research Barret Zoph announced their departures. Other key figures, including co-founder and former chief scientist Ilya Sutskever, as well as AI researcher Andrej Karpathy, also left the company.

Currently, OpenAI's estimated valuation stands at $300 billion.

What’s Next

Elon Musk is demanding a fair assessment of OpenAI's assets, claiming that his investments of $45 million since 2015 were made on the condition that the company maintains its nonprofit status.

The company’s board of directors has not yet responded but will be compelled to consider the proposal. If the deal goes through, OpenAI may return to a more open format.

Lawyers note that Musk's proposal could:

  • complicate the transition of OpenAI into a fully commercial company;
  • endanger support from Microsoft and other investors;
  • trigger new legal disputes.

Earlier, Spot reported that Alibaba unveiled a new version of its AI model—Qwen 2.5.