TLDR
- Taking charge: Musk at the helm of a $97.4 billion offer to buy OpenAI, backed by a coalition of investors.
- In a surprising twist, Sam Altman, the CEO of OpenAI, turned down the offer and instead suggested a $9.74 billion bid to acquire Twitter.
- Key players in the investor group include Baron Capital, Valor Equity, Atreides Management, Vy Capital, and 8VC, pulling some serious financial weight.
- The bid appears to be a strategic move, possibly aimed at countering OpenAI's ambition to convert into a profit-oriented entity by 2026.
- Figure AI, a robotics innovator, has ended its collaboration with OpenAI, claiming a significant leap in robotic intelligence—a move that may reshape alliances in the tech space.
A group of investors led by Elon Musk h The impressive $97.4 billion proposal aims to bring OpenAI under new ownership, a company originally co-founded by Musk back in 2015. Placed before OpenAI’s board on Monday, the bid comes amidst OpenAI's transformation journey from a nonprofit to a profit-driven organization.
The investor consortium The group includes firms with longstanding ties to Musk, such as Baron Capital Group, which has substantial holdings in both Tesla and SpaceX. . The proposal sees contributions from Baron Capital, investing heavily in Musk's ventures, together with Valor Equity Partners, Atreides Management, Vy Capital, and 8VC. The entertainment mogul Ari Emanuel also joins through his investment fund.
Marc Toberoff, legal counsel for Musk, presented the proposal to OpenAI’s board, with the consortium willing to match any higher offers. The endeavor is aimed at realigning OpenAI with its initial open-source mission focused on safety.
In a swift retort, OpenAI's CEO Sam Altman dismissed the offer via Twitter, humorously suggesting a Twitter buyout for $9.74 billion if interested, hinting at some friction between the tech moguls.
Firmly declining the offer, Altman hinted at a $9.74 billion Twitter acquisition, if there's any interest there.
— Sam Altman (@sama) February 10, 2025
Timing is strategic, as OpenAI is in the midst of shifting to a profit-centered model by the end of 2026, a shift underscored by a $6.6 billion funding round last October valuing the company at $157 billion.
Investors joining Musk hold significant experience with his initiatives. Baron Capital, managed by Ron Baron, places major funds in Tesla and SpaceX. Atreides Management's Gavin Baker invested in SpaceX at Fidelity and backed Tesla's compensation strategies.
Antonio Gracias of Valor Management, notable for his early investments in SpaceX and Tesla, is part of the investor pool, along with Vy Capital backed by Alexander Tamas, a stakeholder in Musk's Boring Company and Neuralink.
Recent AI industry movements include Figure AI's conclusion of its OpenAI collaboration, citing impressive advancements in robotic intelligence—unveiling possible new trajectories.
OpenAI’s trajectory towards for-profit status has sparked controversy, facing several lawsuits from Musk and concerns from Meta. Meanwhile, Microsoft, a key OpenAI investor, keeps discussions on equity stakes ongoing.
If Musk’s takeover succeeds, it could lead to a merger between xAI, his AI endeavor, and OpenAI, reuniting him with the organization he left in 2019, followed by Altman assuming the CEO role.
The proposed takeover dwarfs Musk’s previous $43 billion Twitter purchase in 2022, achieved through substantial backing from investors and corporate associates.
Some analysts speculate that the bid might be less about acquisition and more about escalating costs associated with OpenAI’s structural shift, coinciding with its nonprofit-to-profit conversion.
Toberoff highlighted the necessity for equitable charitable compensation in his statement to The Wall Street Journal, underscoring concerns over managing what may be this era's most groundbreaking technology.
Beyond Altman's tweet, OpenAI has yet to provide an official response to the acquisition proposal, proceeding with its planned shift to a for-profit framework.
