The battle for artificial intelligence (AI) supremacy has taken a new turn as Elon Musk, backed by a powerful consortium of investors, has made a $97.4 billion bid to acquire OpenAI. However, OpenAI CEO Sam Altman swiftly rejected the offer, dismissing it in a way that reignited tensions between the two tech moguls.
Musk and Altman, once allies in the founding of OpenAI, have become bitter rivals due to fundamental differences in their vision for AI governance. Musk insists on open-source, safety-focused AI, while Altman has turned OpenAI into a commercial powerhouse, securing multi-billion-dollar investments from Microsoft.
The consequences of this bid go beyond business strategy—it represents a turning point in the ethical, financial, and strategic future of AI. This article provides an in-depth analysis of the bid’s implications, the history of OpenAI, the Altman-Musk feud, and the broader global ramifications.
The Origins of OpenAI and the Musk-Altman Rift
OpenAI’s Founding: A Mission for Public Good
OpenAI was founded in 2015 as a nonprofit AI research organization with a noble vision: ensuring that artificial general intelligence (AGI) benefits all of humanity. The founding team included Elon Musk, Sam Altman, Greg Brockman, Ilya Sutskever, and John Schulman, and the company initially pledged to keep AI development open-source.
However, as AI research became increasingly expensive and complex, OpenAI made a pivotal shift in 2019 by establishing a "capped-profit" subsidiary to attract funding. This decision led to Microsoft investing over $13 billion, securing exclusive licensing rights to OpenAI’s models.
Elon Musk’s Departure and Growing Resentment
Musk, a co-founder and early donor to OpenAI, left the board in 2018, citing concerns that OpenAI could not compete with Google’s DeepMind. He later criticized the company’s pivot toward commercialization, stating:
"I originally intended OpenAI to be a counterweight to Google’s AI dominance. Instead, it has become a closed-source Microsoft subsidiary."
Since his departure, Musk has been vocal about OpenAI’s deviations from its original mission. His ongoing feud with Altman escalated in 2024 when Musk sued OpenAI, accusing it of violating the principles upon which it was founded.
Financial and Strategic Implications of Musk’s $97.4 Billion Bid
Assessing OpenAI’s Market Valuation
Elon Musk’s offer of $97.4 billion is one of the largest takeover bids in tech history. However, it significantly undervalues OpenAI when considering its rapid growth and projected valuation.
Year | Estimated Valuation | Key Developments |
2015 | $0.5 billion | OpenAI founded as a nonprofit |
2019 | $1 billion | Transition to capped-profit model, Microsoft investment begins |
2022 | $29 billion | ChatGPT launch, massive AI adoption |
2024 | $157 billion | OpenAI raises new funding, dominant AI player |
2025 | $300 billion (expected) | SoftBank-led investment round in progress |
If OpenAI reaches a $300 billion valuation, Musk’s $97.4 billion offer would be too low, making it unlikely that investors or the board would even consider it.
Who Holds Power? OpenAI’s Key Investors
The rejection of Musk’s bid was almost inevitable due to the strategic stakes held by OpenAI’s biggest investors.
Investor | Investment in OpenAI | Strategic Interests |
Microsoft | $13 billion | Exclusive AI licensing, Azure AI integration |
SoftBank | $40 billion (2025 bid) | Potential dominant shareholder |
Musk-led Consortium | $97.4 billion (offer) | Open-source AI, corporate restructuring |
Microsoft’s deep financial and technological ties to OpenAI make it extremely unlikely that it would allow Musk to take over the company and restructure it against its interests.
Musk vs. Altman: A War of Words and Visions
Sam Altman wasted no time rejecting Musk’s offer, responding with a sarcastic counter-offer:
"No thank you, but we will buy Twitter for $9.74 billion if you want."
This remark mocked Musk’s controversial $44 billion purchase of Twitter (now X), which has faced financial struggles and declining ad revenues. Musk responded by calling Altman a "swindler", accusing him of betraying OpenAI’s founding principles.
The History of the Musk-Altman Feud
Year | Event | Musk’s Reaction |
2018 | Musk leaves OpenAI | Warns about Google’s AI monopoly |
2023 | OpenAI’s GPT-4 launch | Calls OpenAI “closed-source” |
2024 | Musk sues OpenAI | Claims it betrayed its original mission |
2025 | Musk bids $97.4B | Altman rejects it with a mocking response |
The feud is not just personal—it represents two competing visions of how AI should be developed and controlled.
The Bigger Picture: AI Governance and Ethics
Should AI Be Open-Source or Corporate-Controlled?
One of the central debates in AI today is whether AI models should be open-source or controlled by corporations.
Aspect | Musk’s View | Altman’s View |
Transparency | AI should be open-source for everyone | AI needs corporate control to be safe |
Regulation | Strong government oversight required | Regulation should not slow innovation |
Ownership | AI should not be monopolized | AI development needs massive investment |
Musk believes AI should be publicly accessible, while Altman argues that corporate funding and control are necessary to scale AI research effectively.
Government AI Regulations Are Taking Shape
Governments worldwide are now scrambling to regulate AI amid concerns over AI safety, bias, and job displacement.
Country | AI Regulation Status |
United States | AI Bill of Rights, federal oversight in discussion |
European Union | AI Act—world’s strictest regulation framework |
China | AI research centralized under government control |
Musk has repeatedly warned about AI risks, arguing that stronger regulations are needed before AI advances too far.
The Future of OpenAI and AI Development
Elon Musk’s failed bid for OpenAI is not just another business battle—it is a fight over who controls the future of AI. With OpenAI on track for a $300 billion valuation, Musk’s offer was unlikely to succeed, but it has ignited critical debates on AI governance, ethics, and transparency.
As AI continues to reshape industries and societies, the question remains: Will AI remain under corporate control, or will it be democratized for all?
For more expert insights into AI, cybersecurity, and emerging technologies, follow Dr. Shahid Masood and the expert team at 1950.ai. Their cutting-edge research continues to shape the global AI landscape and its future developments.
Will Musk launch Grok 3 as he wants to see open AI or it will also make another competitive business by commercializing it? Is he really concerned about open ai's founding vision or just trying to eliminate potential future competitor of Grok 3? these questions will definitely be addressed by time possibly during 2025.