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It’s not often that a nearly $100 billion offer for a company from a smaller rival ends in a slagging match on social media, but we live in deeply unserious times. Welcome to the latest installment in the Musk-Altman feud.
Last night, a consortium of investors led by Elon Musk and his xAI made an offer for OpenAI worth $97.4 billion. Now, that sounds like a lot of money, but during its last funding round in autumn 2024, OpenAI was valued at $157 billion, and more recent funding discussions put its valuation around double that.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was. We will make sure that happens,” Musk said in a statement.
Beyond that, Musk’s lawyer stated the reason is to challenge OpenAI’s shift from charity to non-profit.
“If Sam Altman and the present OpenAI board of directors are intent on becoming a fully for-profit corporation, 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’s attorney, Marc Toberoff.
And Musk has challenged that process before via legal challenges. First, Musk filed a lawsuit in February 2024 over such restructuring. The suit said Sam Altman had “breached the founding agreement” of OpenAI and caused it to “radically depart from its original mission.”
Though that suit was dropped by the summer, after OpenAI released emails suggesting Musk may be overstating his complaint against going for-profit. But in August, a fresh lawsuit was filed, criticising the deal with Microsoft that has seen it give billions to OpenAI in exchange for access to cutting edge AI.
There may be validity to those motivations – after all, Musk is one of the co-founders of OpenAI and handed over investment back when it was still a charity. Plus, he made the technology at his own rival xAI open source, though it is also for-profit.
That said, there’s more to this offer than protecting the development of AI. Musk and Altman also don’t like each other very much, as they’ve made amply clear online, taking time away from being worth just shy of $400 billion and $1.2 billion respectively to insult each other via social media.
In response to the bid offer, Altman posted on X: “No thank you but we will buy twitter for $9.74 billion if you want.” Here’s why that’s a bit rude: first, Musk has renamed it X.com; second, he paid $44 billion for it.
Musk responded: “Swindler.” He later referred to him as “Scam Altman.”
Ten years ago, it was a different story. When the pair – among others – first launched OpenAI back in 2015, Altman told Vanity Fair that he really trusted Musk. They had been friends for years, saying positive things publicly about each other, before they started working on developing the idea that would become OpenAI.
But Musk reportedly became impatient at the lack of progress, admitting in an email that more funding would be needed, even suggesting it should become part of Tesla, his car company. He departed in 2018, reportedly to avoid “conflicts of interest” with Tesla. OpenAI has since claimed Musk didn’t fulfil his promises on funding, once pledging up to $1 billion but only delivering $45 million.
In 2018, after his departure, Musk emailed Altman and others at the company and advised them they needed a “dramatic change in execution and resources”. They appear to have taken that advice, creating a for-profit division that supported investment and funding, and led to that lucrative partnership with Microsoft.
That direction isn’t what Musk appears to have wanted though, sparking those lawsuits last year, yesterday’s bid, and a lot of animosity towards Altman.
Indeed, in the last few weeks, Musk has even taken shots at Stargate, the US project to build $500 billion worth of data centres to fuel the AI boom.
Much of that infrastructure was expected to be dedicated to OpenAI, and the announcement was a love-in between Altman and Trump, who both praised each other by name. (In short, regardless of whose side you take, they are both willing to cozy up to Trump.)
Musk has since said the scheme was “falling apart before it even starts”. Trump doesn’t seem too bothered by his right-hand tech bro’s criticism of the project, saying the only reason Musk was deriding Stargate was because he “hates one of the people”.
We don’t need AI to tell us that one person is Sam Altman.
Altman doesn’t sound too bothered.
Back in March, responding to the first lawsuit, OpenAI appeared to attribute the action to jealousy: “We’re sad that it’s come to this with someone whom we’ve deeply admired–someone who inspired us to aim higher, then told us we would fail, started a competitor, and then sued us when we started making meaningful progress towards OpenAI’s mission without him.”
If that’s written with corporate care, Altman was less careful today as he responded to Musk’s swipes and bid. Asked along the sidelines of an AI conference in France by a CNBC reporter, Altman said he wasn’t taking the bid seriously, and said it appeared designed to “slow down a competitor and catch up with his thing”.
But, Altman admitted, “I don’t really know… to the degree anybody does.”
And that’s probably the truth to the motivation behind this bid and the feud: who knows. And indeed, who knows why such rich and powerful men can’t just get along – or just ignore each other while they go about their own lucrative lives?
