Elon Musk has made headlines with a stunning $97.375 billion offer to acquire the nonprofit portion of OpenAI, the company behind ChatGPT and other groundbreaking AI technologies. The proposal, submitted through attorney Marc Toberoff on behalf of a Musk-led consortium, arrives at a critical juncture as OpenAI CEO Sam Altman attempts to restructure the organization from its current nonprofit-controlled model into a for-profit entity.
The complexity of OpenAI’s structure lies at the heart of this drama. Currently, OpenAI operates as a nonprofit organization that controls a highly valuable commercial business. Altman’s restructuring plan would convert the company into a for-profit entity while giving the nonprofit arm a stake in the new structure. Musk’s coalition argues this arrangement undervalues the nonprofit portion, prompting their massive counteroffer.
The timing and motivation behind Musk’s bid remain hotly debated. According to The Wall Street Journal, the offer could force OpenAI’s board to reassess the nonprofit’s valuation, potentially increasing its stake in the for-profit entity. This complicates a major funding round that was expected to value OpenAI at $300 billion. Altman himself has dismissed the offer as a competitive tactic, stating: “I think he is probably just trying to slow us down. He obviously is a competitor.”
Musk’s track record adds layers of uncertainty to the proposal. Critics point to his history of making offers that don’t materialize, including his 2018 claim of having “funding secured” to take Tesla private (which never happened) and his 2022 attempt to back out of the Twitter acquisition after signing the deal. He also claimed in March 2024 that he wouldn’t donate to presidential candidates, then proceeded to contribute over $250 million to Donald Trump’s campaign.
However, betting against Musk has proven dangerous historically. Tesla and SpaceX both seemed like improbable ventures that ultimately succeeded. Even his controversial Twitter acquisition, despite massive advertiser exodus and revenue decline, has transformed the platform into a powerful political megaphone. His investors may also benefit through ownership stakes in xAI, Musk’s competing AI venture.
The situation presents a genuine dilemma for OpenAI’s leadership. Whether Musk’s offer represents a serious acquisition attempt or a strategic maneuver to disrupt Altman’s restructuring plans, it forces OpenAI to carefully consider the valuation of its nonprofit entity and the implications for its transformation into a for-profit company.
Key Quotes
I think he is probably just trying to slow us down. He obviously is a competitor.
OpenAI CEO Sam Altman’s response to Musk’s $97 billion offer suggests he views it as a competitive tactic rather than a genuine acquisition attempt. This quote reveals the deep rivalry between the former allies and Altman’s belief that Musk is using the offer to disrupt OpenAI’s restructuring plans.
Musk’s offer could force OpenAI’s board of directors to reassess how it is valuing the nonprofit, which the board has said will be fairly compensated in the transaction and own a stake in the for-profit. The higher the valuation of the nonprofit, the bigger its stake would likely be in the for-profit OpenAI following a conversion.
The Wall Street Journal’s analysis explains the strategic implications of Musk’s offer. Even if not accepted, the bid creates pressure on OpenAI’s board to justify their valuation methodology, potentially increasing the nonprofit’s stake and complicating the company’s $300 billion funding round.
funding secured
This reference to Musk’s infamous 2018 tweet about taking Tesla private illustrates his history of making public offers that don’t materialize. The phrase became notorious when it was revealed Musk didn’t actually have funding secured, leading to SEC penalties and raising questions about the credibility of his current OpenAI offer.
Our Take
This saga perfectly encapsulates the chaotic intersection of AI ambition, corporate governance, and billionaire rivalry. Musk’s offer exists in a quantum state—simultaneously serious and performative—which may be precisely the point. Whether or not he intends to follow through, the proposal achieves multiple objectives: it complicates Altman’s restructuring timeline, forces uncomfortable valuation questions, and positions Musk as a defender of OpenAI’s original nonprofit mission (despite running a competing for-profit AI company).
The broader implication is that AI’s governance remains unsettled. OpenAI’s awkward nonprofit-controlling-for-profit structure was always a temporary solution, and this conflict exposes the tensions inherent in trying to balance world-changing technology with both mission-driven and profit-driven imperatives. As AI capabilities advance and stakes increase, expect more such battles over control, structure, and purpose. The real question isn’t whether Musk is serious—it’s whether any organizational structure can adequately balance the competing demands of AI development in 2025.
Why This Matters
This development represents a pivotal moment in AI industry consolidation and governance. OpenAI stands as one of the most influential AI companies globally, having sparked the current generative AI revolution with ChatGPT. How it structures itself—and who controls it—will shape the competitive landscape for years to come.
The Musk-Altman rivalry has evolved into a proxy battle for different visions of AI development. Musk, who co-founded OpenAI before departing and launching competitor xAI, has consistently criticized OpenAI’s shift from its original nonprofit mission. His offer, whether genuine or tactical, highlights fundamental questions about AI governance: Should transformative AI technology be controlled by nonprofits, for-profit entities, or some hybrid structure?
The financial implications extend beyond OpenAI itself. A $97 billion valuation for just the nonprofit portion would dramatically reshape investor expectations for the entire organization. With OpenAI seeking funding at a $300 billion valuation, any adjustment to the nonprofit’s stake could affect returns for major investors including Microsoft, which has invested over $13 billion. This uncertainty could ripple through the broader AI investment ecosystem, potentially affecting valuations and funding for other AI startups navigating similar structural questions about mission versus profit.
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Source: https://www.businessinsider.com/elon-musk-openai-offer-real-or-troll-sam-altman-2025-2