Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Altman Rejects Elon’s Unsolicited $97.4B OpenAI Bid
AI | Feb 12, 2025
Image: Freepik
Elon Musk’s $97.4B bid for OpenAI Gets Rejected - What It Means for AI's Future
On February 10, 2025, Elon Musk and his investor group submitted an unsolicited $97.4 billion bid to acquire OpenAI. Sam Altman, CEO of OpenAI quickly rejected the bid which comes comes at a time when OpenAI is transitioning from it's non-profit origins to a for profit structure and currently valued at approx. $260 billion of which Microsoft holds a 49% stake. Musk and Altman have been publicly feuding since Musk who co-founded OpenAI in 2015 but departed in 2018 has been an outspoken critic of OpenAI's pivot towards commercialization. Artificial intelligence (AI) power dynamics in play raises questions about Elon's ambitions and own xAI venture.
The Bid and Immediate Response
OpenAI's board they haven't yet seen the offer but Musk's lawyers said it was delivered on Monday, as reported by Reuters. Regardless, the unsolicited bid gained traction on X in a viral exchange. Lots of long time tension between these two, both whom are playing key roles AI's evolution:
Musk's bid on X:
“I want to buy OpenAI for $97.4B.”
Altman's response on X:
no thank you but we will buy twitter for $9.74 billion if you want
— Sam Altman (@sama) February 10, 2025
Musk’s AI Ambitions and Financial Backers
Since leaving OpenAI, Musk has been focusing on his own AI ambitions. In 2023 he launched xAI, a direct competitor to OpenAI based on open-source principles. It launched its flagship product, Grok, which was integrated into Musk's X platform but it hasn't reached the scale of OpenAI's ChatGPT.
See: OpenAI Launches Operator, AI with Task Execution
Musk’s AI efforts are backed by a mix of investors such as Sequoia Capital, Andreessen Horowitz (a16z), BlackRock, Fidelity Management & Research Company, and Valor Equity Partners. Also sovereign wealth funds from Saudi Arabia (Kingdom Holding), Qatar (Qatar Investment Authority), and Oman (Oman Investment Authority) have all invested in xAI.
The Verge reported that Musk's latest consortium for the OpenAI bid includes xAI, Valor Equity Partners, Ari Emanuel, and Joe Lonsdale’s 8VC.
Why Musk Wants OpenAI
Chalk it up to ego or competition? Musk is unhappy with OpenAI's leadership and the direction to move away from its original non-profit mission bound to safe AI development for humanity, and one towards commercialization. After Musk left OpenAI due to disagreements, in 2019, OpenAI adopted a 'capped' for profit model to attract major investments, which ultimately led to Microsoft's multi-billion dollar funding. Musk's discontent has even led his legal team to file lawsuits against OpenAI, claiming that its partnership with Microsoft prioritizes profit over safety.
Musk has also recently expressed concern that there are AI training data shortages, which could limit future model advancements. In addition to OpenAIs significant growth and traction, they have exclusive access to proprietary datasets through Microsoft and LinkedIn giving it a competitive edge in AI innovation, so acquiring OpenAI is a strategic asset and would also secure longer term data access and strengthen xAI's position.
Implications
For OpenAI, the $97.4 billion bid is much lower than the current valuation of $260 billion, and some analysts argue that it could push down the perceived market value, complicating OpenAI's future fundraising efforts.
See: Musk Challenges Funding for Trump’s AI Stargate Initiative
If xAI is struggling to innovate and compete with the likes of OpenAI and Google's DeepMind, it signals Musk may be looking for new partnerships or acquisitions to boost its strategic offerings.
Musk's other businesses like Tesla who is currently under sales pressure, may be further negatively impacted by Musk's latest actions as markets are being to see him spread too thin with significant corporate drift from the demands from Tesla, SpaceX, X, and the quasi-federal agency, the Department of Government Efficiency.
Closing Thought
The battle between Musk and OpenAI is playing out in real time, as tensions grow over AI commercialization, corporate control, and open-source principles. The power plays, decisions, partnerships, and innovations happening today will have lasting implications for the future of artificial intelligence. Stay tuned with eyes wide open.
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