In a dramatic twist that has left Silicon Valley reeling, an investment group fronted by Elon Musk has launched a $97 billion bid to buy out the non-profit portion of OpenAI, the AI research firm behind the viral ChatGPT chatbot to prevent it from becoming a for-profit organization.
Musk co-founded OpenAI with Sam Altman in 2015 with the goal of building “safe and advanced AI for the benefit of humanity”. He departed the organization in 2018, withdrew his funding and has been an outspoken critic of its recent trajectory, especially its close relationship with Microsoft and movement toward a for-profit model.
After Musk left OpenAI in 2018, OpenAI received its first major investment from Microsoft in 2019 when it transitioned from non-profit to a hybrid (“capped” for-profit) model with an investment of $1 billion, $2 billion in 2021 and $10 billion in 2023. OpenAI and Microsoft started in 2016 when OpenAI committed to using Microsoft Azure as its cloud processor.
Due to this partnership, Microsoft became a major investor/shareholder, owning 49% of OpenAI and integrated OpenAI generative into operations; OpenAI gained the financial resources to further the developments of generative AI and access to Microsoft’s Azure cloud platform, which offers high performance computing power to train AI models.
After Musk’s exit from the company, he filed lawsuits against OpenAI in February 2024, accusing the company of abandoning its founding values as a non-profit, however he dropped the lawsuit in June without explanation. In August 2024, Musk filed another lawsuit against OpenAI and Sam Altman with claims that he was manipulated into co-founding OpenAI.
In response to this, OpenAI released a blog revealing the intent behind Musk’s sudden departure from the company. It revealed that in 2017 (before his departure) Musk created a for-profit as OpenAI’s proposed new structure and was clear in his intent to have major equity and full control over the for-profit. When this was rejected he proposed that OpenAI merge with Tesla as he felt they were on a “path to certain failure” with the promise of a $1billion budget.
In addition to his previous lawsuit, he stated that OpenAI and Microsoft illegally tried to monopolize the market for generative AI by violating antitrust law. He also added that OpenAI was seeking profits, neglecting public good in the journey of advancing AI.
Musk’s offer to purchase OpenAI seems to be motivated by a need to return the organization to its founding purpose. In a statement published via his lawyer, Musk said, “It’s time for OpenAI to return to the open-source, safety-first force for good that it once was. We will make sure it does.”
However, Musk’s actions seem to be more driven towards eliminating competition for his AI company xAI, which was formed on July 12 2023 and made its first release of Grok-1 in November 2023. xAI is currently valued at $50 billion.
On February 10 2025, Musk placed a $97 billion bid to OpenAI to which Sam Altman turned down Musk’s offer, stating that OpenAI is not for sale. Altman replied to Musk’s offer on an X (formerly Twitter) post with a sarcastic counteroffer to purchase Twitter for $9.74 billion.
OpenAI never announced its intent to fully transition from non-profit to for-profit, as it still maintains its status as a hybrid model. In a blog released by the company on December 27, 2024 tagged “a stronger non-profit supported by the for-profit success”, it clarified that the non-profit arm of OpenAI would remain intact and oversee the actions of the for-profit while maintaining its founding goals. OpenAI is valued at $157 billion.
Currently, the lawsuit against OpenAI is still in play and has the potential of going to trial as stated by US District Judge Yvonne Gonzalez Rogers in Oakland in the early hours of February 11, 2025. Speculations are still ongoing as to what will be the final result of the trial and if Musk will get his long-time wish of acquiring OpenAI.
