Elon’s hostile takeover bid for OpenAI? Musk-led group tries to purchase management for $97 billion – Firstpost

In a fairly daring transfer that might see one of many greatest hostile takeovers within the tech house in ages, a consortium of buyers led by Elon Musk have made a large $97.4 billion supply to amass the nonprofit that controls OpenAI.  

The AI large, led by Sam Altman, has been step by step shifting from its unique nonprofit mannequin to a for-profit construction—one thing Musk has vocally opposed for years. The tech billionaire appears decided to cease that transition in its tracks with this high-stakes bid.

Musk’s group contains his AI firm, xAI, together with different key gamers like Baron Capital Group and Emanuel Capital. The bid isn’t nearly cash; it’s an influence play that might considerably reshape the way forward for AI improvement and governance. And naturally, with Musk and Altman’s historical past of clashes, this newest improvement is probably going so as to add gasoline to the hearth.

As quickly because the Wall Avenue Journal broke the information of Elon Musk’s bid to take management of OpenAI,, Sam Altman took to X (previously generally known as Twitter), to say: “no thanks however we are going to purchase twitter for $9.74 billion if you would like.” To this, Musk merely replied with the phrase, “Swindler”.

no thanks however we are going to purchase twitter for $9.74 billion if you would like

— Sam Altman (@sama) February 10, 2025

Musk vs Altman: A protracted-running feud

The rivalry between Musk and Altman is nothing new. Musk got here on board OpenAI as a co-founder again in 2015, with the intention  to create a nonprofit organisation centered on protected and clear AI analysis. However their partnership didn’t final lengthy. Musk left the organisation because it began gaining traction and, in typical Musk vogue, went on to kind his personal AI enterprise, xAI, in 2023. Since then, he’s develop into one among OpenAI’s most vocal critics.

Final 12 months, Musk took authorized motion towards OpenAI, accusing its management of betraying the corporate’s unique mission by chasing earnings. He even sought a courtroom injunction to dam its transition to a for-profit construction. Regardless of his efforts, OpenAI pushed forward, arguing that the shift was essential to safe funding for superior AI analysis and improvement.

Now, Musk is elevating the stakes as soon as once more. In an announcement, he expressed his perception that OpenAI must return to being an open-source, safety-first organisation. The billionaire clearly isn’t backing down. Nonetheless, Altman wasn’t too impressed with the supply. In a cheeky response posted on X (previously Twitter), Altman mentioned he’d fairly purchase Twitter for $9.74 billion as an alternative. His public rejection of Musk’s bid didn’t go away a lot room for negotiation, although it’s unlikely Musk will hand over that simply.

Energy struggles and authorized wrinkles

Whereas the general public jabs between Musk and Altman make for entertaining headlines, there are severe authorized and governance questions in play. OpenAI’s nonprofit division holds vital management over the for-profit aspect, and any main choice about its future should align with the nonprofit’s mission. This contains guaranteeing that the nonprofit’s monetary pursuits are protected.

Authorized consultants have famous that Musk’s bid might complicate OpenAI’s plans to distance itself from nonprofit oversight. If the board had been to reject Musk’s supply in favour of a decrease valuation from one other investor, it may need to justify why it’s not taking the higher deal. This might result in elevated scrutiny and presumably even authorized challenges relating to the board’s fiduciary obligations.

Analysts consider this might drive OpenAI right into a troublesome place. On one hand, the corporate needs the liberty to function like a for-profit enterprise to draw buyers. Alternatively, Musk’s bid units a excessive benchmark that might be laborious to disregard. As one skilled put it, this transfer has thrown a “wrench” into OpenAI’s fundraising plans, probably complicating future negotiations with different buyers.

Can musk make it occur?

Musk could be wealthy—very wealthy—however even for him, pulling off a deal of this measurement is not any small feat. OpenAI was lately valued at round $157 billion, with SoftBank reportedly contemplating a brand new funding spherical that might push its valuation to a staggering $300 billion. For Musk to amass management, he’ll have to safe monumental quantities of capital.

His choices embrace promoting a few of his Tesla shares, taking loans towards these shares, or utilizing his stake in SpaceX as collateral. Nonetheless, after his pricey $44 billion buy of Twitter in 2022, his leverage with banks could also be restricted. Financing such a bid will possible require a mixture of artistic methods and high-stakes negotiation.

Business watchers say Musk’s bid might disrupt OpenAI’s present fundraising efforts. The consortium of buyers backing him provides credibility to his supply, making it troublesome for OpenAI to dismiss out of hand. The nonprofit’s board might want to weigh its choices rigorously, balancing monetary issues with its long-term objectives.

For now, the ball is in OpenAI’s courtroom. Whether or not Musk can finally wrest management of the corporate stays to be seen, however one factor is definite—this battle between two of the tech world’s greatest personalities isn’t over but.