Musk’s $97.4B OpenAI Offer Sparks AI Competition & Governance Concerns

Elon Musk and a consortium of investors, including x.AI, 8VC, and Vy Capital among others, have offered $97.4 billion to acquire OpenAI. While CEO Sam Altman has publicly dismissed the bid, OpenAI’s board has yet to formally reject it, likely due to legal obligations requiring it to evaluate such offers.

The bid, which surfaced amid Musk’s ongoing lawsuit against OpenAI, adds another layer of complexity to the AI industry’s high-stakes competition. While Musk claims OpenAI’s shift from nonprofit to for-profit violates its original mission, his own acquisition attempt contradicts his argument that OpenAI’s assets can’t be “transferred away” for private gain, with Altman's lawyers saying he can't have it both ways.

Adding to concerns, the full letter of intent from Musk’s group—made public in a recent legal filing—reveals that before committing to the purchase, the buyers requested access to OpenAI’s financial records, internal operations, and staff interviews. This has raised speculation that Musk’s interest may not be solely in acquiring OpenAI, but rather in gaining insights that could benefit his competing AI company, x.AI.

Legal, Competitive, and Strategic Implications

Musk’s bid comes at a critical time in the AI sector, where control over foundational models is increasingly seen as a geopolitical and corporate battleground.

Key takeaways from the legal filings and offer letter include:

• Offer Expiration Date: The bid remains open until May 10, 2025, unless finalized earlier or formally rejected.

• Cash-Only Deal: The proposed $97.375 billion purchase price would be paid entirely in cash—an unusual move for Musk, who previously used debt financing to acquire Twitter (now X).

• Pre-Purchase Access to OpenAI Data: The offer included a due diligence request for OpenAI’s business records, assets, and staff interviews—standard for acquisitions but highly sensitive given x.AI’s competitive position.

• Potential Price Inflation Tactic: Some analysts suggest the bid may have been designed to increase OpenAI’s valuation, forcing Altman’s team to pay more in its transition to a for-profit model.

OpenAI has characterized the offer as an improper attempt to undermine a competitor, while Musk’s legal team insists the bid is legitimate. However, Musk’s attorneys also confirmed that he would withdraw the bid if OpenAI halted its for-profit transition, suggesting that the offer itself is a negotiation tool as much as a genuine acquisition attempt.

The Broader AI Power Struggle

This bid underscores the growing corporate competition over AI leadership, particularly among companies developing general-purpose AI models. Musk’s move signals that AI firms are not just racing to develop more powerful models, but also to control the infrastructure, governance, and ethical direction of the technology.

The situation also raises concerns about AI transparency and governance. While OpenAI has positioned itself as a leader in AI safety and accessibility, its shift toward a for-profit structure has led to criticism from Musk and others who argue it has deviated from its founding mission. At the same time, Musk’s aggressive legal and financial maneuvers suggest that AI development is becoming as much about strategic corporate positioning as technological progress.

Looking Ahead

Musk’s bid puts OpenAI’s governance model under a spotlight. While unlikely to succeed, the offer forces OpenAI’s board to clarify its long-term strategy—whether as a private AI powerhouse or an entity with broader public obligations.

For regulators and industry leaders, the battle between OpenAI and Musk highlights larger concerns about AI consolidation, corporate influence, and competitive ethics. As AI companies secure more funding and political backing, questions remain:

• Should AI governance prioritize public accountability over corporate control?

• How should regulators oversee competitive AI industry dynamics?

• What safeguards should exist to prevent dominant AI players from leveraging acquisitions for strategic advantage?

While Musk’s legal argument frames his bid as an effort to keep OpenAI a nonprofit, his demand for access to OpenAI’s records before finalizing the purchase suggests a more strategic motive. The situation underscores that AI is not just a technological revolution—it’s a power struggle for who controls its future.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.