Elon Musk and a group of co-investors have offered $97.4bn to buy the non-profit that controls OpenAI.

First reported by The Wall Street Journal, the bid complicates OpenAI Chief executive Sam Altman’s attempt to convert the start-up to a for-profit entity. In response, Altman hit back at the offer and even made a play to buy X, the platform formerly known as Twitter which Musk purchased for $44bn in June.

Altman stated on X: “No thank you, but we will buy Twitter for $9.74bn if you want.” To which Musk replied, “swindler”. A term he used to describe Altman previously when he claimed that the backers of Stargate, a new joint venture between OpenAI, Oracle and SoftBank that plans to invest $500m in US data centres, didn’t have the promised funds.

no thank you but we will buy twitter for $9.74 billion if you want

— Sam Altman (@sama) February 10, 2025

For-profit ambitions

Altman and Musk were part of the group that founded OpenAI in 2015 as a not-for-profit research organisation before the latter left the company’s board in 2018. Since its inception, OpenAI has been credited with being at the forefront of the advancement of AI technology and is most widely known for the development of the generative AI chatbot, ChatGPT.

Altman is now in the process of converting OpenAI into a for-profit, a decision that Musk has said betrays the start-up’s founding mission and is attempting to block with a lawsuit against Altman and OpenAI. 

“It is vital that the charity be fairly compensated for what its leadership is taking away from it: control over the most transformative technology of our time,” said Musk in a statement issued by his attorney, Marc Toberoff. “We will make sure it happens.”

A stumbling block in the attempts to turn OpenAI into a more traditional for-profit company has been placing a value on the non-profit arm. 

Musk’s bid, which is backed by his own AI start-up xAI, as well as partners including Baron Capital and Valor Equity Partners, has set a high bar and may mean that whoever runs the non-profit would end up with a large and potentially controlling stake in the new era of OpenAI.

The Financial Times reports that the charity entity of OpenAI has been valued at $30bn, however, Musk’s attorneys have argued the figure should be far higher.

It is important to note that a higher valuation would also mean a bigger payout for Musk, whose initial tens of millions of dollars investment in the early days of the company would be returned for a significantly greater value.  

AI arms race intensifies

This latest news comes as the AI arms race intensifies in both the public and private sectors.

Tech giants such as Meta, Google and Amazon are increasingly integrating AI into their products and announcing huge investments in AI infrastructure and development.

OpenAI itself has committed huge sums to the advancement of the AI Industry, entering into the aforementioned Stargate joint venture – which US President Donald Trump described as a “resounding declaration of confidence in America’s potential”.

Musk’s near $100bn offer, which a source close to OpenAI has claimed is “purely a publicity stunt”, adds further complexity to the direction OpenAI is set to take. 

As of yet, OpenAI is not entertaining external offers for its non-profit arm but Toberoff has called on Delaware and California Attorney Generals to force OpenAI to launch a competitive process.

California’s Attorney General has also heard from OpenAI’s rivals Meta Platforms, which penned an open letter urging the state to block the planned conversion. 

OpenAI has pledged to complete the transition, which would be one of the biggest-ever conversions of a charity to a for-profit, by late 2026. An October funding round raised $6.6bn and valued the start-up at $157bn.