Elon Musk's xAI Offers $97.4 Billion for OpenAI, Reigniting Feud with Sam Altman

Elon Musk's $97.4 Billion Bid for OpenAI Sparks Tech World Frenzy

In a dramatic turn of events that has sent ripples through the tech industry, Elon Musk, through a consortium backed by his AI venture xAI, has launched an unsolicited bid of $97.4 billion for control of OpenAI. This aggressive move comes just months after Musk initiated a lawsuit against OpenAI, citing its shift towards a for-profit business model as a betrayal of its original open-source and safety-focused mission.

The Unsolicited Bid and Musk's Stated Intentions

The Wall Street Journal reported on Monday that Musk's camp has formally presented this substantial offer to the OpenAI board. The underlying goal, according to sources cited by the WSJ, is to merge xAI with OpenAI, effectively bringing the latter back under Musk's influence and, in his view, restoring its foundational principles.

Musk's lawyer, Marc Toberoff, conveyed Musk's sentiment in a statement to the OpenAI board: "It's time for OpenAI to return to the open-source, safety-focused force for good it once was. We will make sure that happens."

OpenAI's Response and the Altman-Musk Feud

OpenAI CEO Sam Altman has publicly rebuffed Musk's overtures. In a surprising counter-offer, Altman reportedly proposed purchasing Twitter (now rebranded as X, "The Everything App") from Musk for the same $97.4 billion valuation. This exchange highlights the deep-seated and long-standing animosity between the two tech titans.

A History of Conflict and Co-Founding

The rivalry between Musk and Altman is rooted in their shared history with OpenAI. They were co-founders of the company in 2015. However, Musk departed from OpenAI's board in 2018 after his demands for majority equity, absolute control, and the CEO position were rejected. This departure marked a significant divergence in their paths.

Following his exit, Musk founded xAI in 2023, which developed the Grok chatbot. He has since been a vocal critic of OpenAI, frequently accusing the company and Altman of deviating from their original mission and engaging in unethical practices. Musk has also been accused of relentlessly harassing OpenAI and Altman.

Musk's Public Stance on AI Safety and xAI's Launch

Musk's commitment to AI safety has been a recurring theme in his public statements. In March 2023, he co-signed an open letter urging AI labs to pause the training of systems more powerful than GPT-4 for at least six months. Coincidentally, xAI publicly launched approximately six months after this letter was published, a timing that has raised eyebrows.

Allegations and Legal Battles

Musk's criticism of OpenAI has often manifested in legal action. In March 2023, he filed a lawsuit against OpenAI, Altman, and President Greg Brockman, alleging a breach of the company's founding contract. The lawsuit claimed that their pursuit of commercial interests had compromised the public good. Although Musk later withdrew this suit, he revived it in August with similar claims, asserting that OpenAI had transformed from a tax-exempt charity into a "$157 billion for-profit, market-paralyzing gorgon" in just eight years, betraying his initial contributions.

In November, Musk expanded his lawsuit to include Microsoft, a key OpenAI backer, and named Shivon Zilis, the mother of three of his children, as a plaintiff. OpenAI responded in December with a blog post titled "Elon Musk wanted an OpenAI for-profit," presenting email evidence to support its claims that Musk had initially supported the transition to a for-profit model.

The ongoing legal battles underscore the intense and protracted nature of the feud between Musk and Altman, with no clear resolution in sight.

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About the Author

Andrew Tarantola is a journalist with over a decade of experience reporting on emerging technologies, including robotics, machine learning, and artificial intelligence. He can be reached on Twitter at @terrortola.