Musk’s $97B offer to buy OpenAI rejected as leadership stands firm

Elon Musk and a consortium of investors made a $97.4 billion offer to acquire the nonprofit controlling OpenAI, escalating a battle over the future of the ChatGPT maker, according to a report from the Wall Street Journal. 

OpenAI CEO Sam Altman swiftly dismissed the bid, posting on X: “no thank you but we will buy twitter for $9.74 billion if you want.”

OpenAI’s board appears to be backing Altman’s decision. In a message to staff, Altman said the board has no intention of considering Musk’s offer, stating that the proposal does not align with OpenAI’s mission, according to The Information.

Altman reportedly called the attempt “embarrassing to watch.”

This marks Musk’s latest move to block OpenAI’s shift to a for-profit structure. Musk co-founded OpenAI with Sam Altman in 2015 as a nonprofit but left before it gained traction. In 2023, he launched xAI, a direct competitor in the AI space.OpenAI argues that a for-profit structure is necessary to secure the funding to advance its AI technology.

Musk sued Altman and OpenAI leaders last year, claiming they violated agreements by prioritizing profit over OpenAI’s original mission.

In November, Musk sought a court injunction to block the transition, arguing that OpenAI was founded to develop AI for the public good but has instead become a commercial enterprise.

Concerns about OpenAI’s future

Musk’s takeover attempt adds new uncertainty to OpenAI, raising questions about its leadership and future direction. 

Although the bid has been rejected, the ongoing power struggle could unsettle enterprise technology firms that rely on OpenAI’s AI models, particularly those embedded in Microsoft’s cloud services. 

“Elon Musk’s potential bid for OpenAI could introduce changes affecting enterprise customers that rely on OpenAI’s models, particularly those integrated into Microsoft’s Azure, 365 Copilot, and GitHub Copilot,” said Muskaan Jain, senior analyst at Everest Group. “A transition in leadership may lead to operational adjustments, potential licensing renegotiations, and shifts in AI development timelines.”

Microsoft’s exclusive cloud partnership with OpenAI could come under review, potentially pushing businesses to consider rival AI providers or open-source alternatives.

Meanwhile, Musk’s push for open-source AI may add pressure on OpenAI to rethink its strategy, raising questions about the future of its partnerships and commercial model.

“In response, Microsoft could adjust its AI strategy, potentially accelerating the expansion of competing AI platforms,” Jain added. “Given these factors, enterprises relying on OpenAI’s technology may benefit from assessing diversification strategies to ensure continuity and flexibility in their AI deployments.”

Despite recent hiccups, OpenAI is currently seen as a reliable innovator in the AI space under Altman’s leadership, according to Hyoun Park, CEO and chief analyst at Amalgam Insights.

“Operationally, Musk has been erratic in his operational execution over the past few years with little innovation in Tesla software,” Park added. “Although Musk undoubtedly has a significant fandom, his recent occupation of the federal buildings and wholesale accessing of government data does not necessarily make him a trustworthy manager for the enterprise technology that Microsoft supports.” 

Open-source dilemma

Some analysts suggest that keeping OpenAI’s core models open source would be more beneficial for enterprises, allowing them to build on top of the technology while maintaining flexibility.

An open approach could also strengthen OpenAI’s position against emerging challengers like DeepSeek, which is pushing alternatives in the AI space.

“For the industry as a whole, especially enterprises, an open-source approach provides more stability and clarity,” said Pareekh Jain, CEO of Pareekh Consulting. “Right now, vendor lock-in is a major concern. Enterprises are unsure about costs and future pricing models.” DeepSeek’s entry into the market has heightened concerns over AI pricing, adding pressure on OpenAI’s business model and enterprise adoption strategies.