OpenAI CEO Sam Altman Rejects Elon Musk's Billion Dollar Offer
OpenAI CEO Sam Altman has declined an unsolicited offer from a group of investors led by Elon Musk to purchase the nonprofit organization OpenAI for $97.4 billion.
This offer represents a significant decrease in OpenAI's valuation. CNBC reports that SoftBank intends to invest $40 billion in OpenAI at a valuation of $260 billion. Altman shared his response to Musk, initially reported by the Wall Street Journal.
In his reply posted on X, Altman stated, "No thank you, but we will buy Twitter for $9.74 billion if you want."
Musk quickly replied, labeling Altman a "swindler." Musk purchased X, previously known as Twitter, for $44 billion in 2022.
Both Musk and Altman co-founded OpenAI in 2015 as a nonprofit, but they parted ways due to differing visions for the company's future.
Since their split, Altman has aligned OpenAI with Microsoft (MSFT), which has invested billions into the company granting it access to OpenAI's AI models while also acting as its cloud services provider.
Altman is now aiming to convert OpenAI into a for-profit entity, a move Musk is legally contesting. This lawsuit revolves around Musk's original $45 million donation intended to support the startup, which he asserts was conditioned on OpenAI remaining a nonprofit.
Legal experts assert that OpenAI is obligated by law to sell its assets at fair market value. In January, Musk's attorney petitioned California's attorney general to ensure that fair market value is honored, citing concerns that OpenAI and Microsoft might devalue assets.
Although Musk's $97.4 billion offer suggests there's interest in valuing the nonprofit at that level, legal analysis infers that various unpredictable factors like OpenAI's growth trajectory, substantial debt, complex business structure, and ongoing legal battles could greatly distort its valuation.
Musk also leads xAI, which competes with OpenAI.
This public disagreement isn't new; Musk had previously claimed on X that OpenAI, alongside SoftBank and Oracle, lacked the required funds, up to $500 billion, to finance their collaborative Stargate Project.
