Source: Jinshi Data

Tesla boss Elon Musk and a group of co-investors have submitted a nearly $100 billion copy of nonprofits that control OpenAI. The acquisition offer complicated CEO Sam Altman's efforts to turn the startup into a for-profit entity.

Musk submitted a bid to the OpenAI board of directors on Monday to acquire all assets of the nonprofit, according to a person directly familiar with the matter.

Short after the Wall Street Journal first reported that Musk offered to acquire OpenAI for $97.4 billion, Ultraman said on social networking site X: "No, thank you, but if you want, we will Acquisition of Twitter for $9.74 billion. "Musk acquired Twitter in 2022 and renamed it X.

Ultraman responded to Musk's offer of $97.4 billion to control OpenAI: No thanks

Musk then commented under Ultraman's response post: Liar

Ultraman is being Transform OpenAI into a for-profit company, freeing the company from its roots as a non-profit research organization. Musk has tried to undermine the effort several times, and his startup xAI is a direct competitor to OpenAI.

Last month, Musk's attorney Marc Toberoff called on Delaware and California attorneys general to force OpenAI to conduct a competitive auction of the nonprofit.

OpenAI has stated that it does not accept external acquisition offers for the nonprofit, but declined to comment on the acquisition.

Musk's acquisition of the nonprofit is the latest blow to the long-term fierce competition between him and Ultraman. The former collaborators are now competing to dominate AI, raising tens of billions of dollars in funding to build huge data centers. OpenAI plans to develop a $500 billion artificial intelligence infrastructure in the next few years through a SoftBank-backed project called Stargate.

In 2015, Ultraman and Musk co-founded OpenAI under the name of charity. Before leaving the board in 2018, Musk invested tens of millions of dollars in the emerging company. In 2019, after Musk left the company and Ultraman became CEO, OpenAI created a for-profit subsidiary as a tool to raise funds from Microsoft and other investors. Ultraman is transforming the subsidiary into a traditional company and will make non-profitThe organization is split out, which will own equity in the new for-profit organization.

Musk said the transformation went against the startup’s founding mission. He has filed lawsuits against Ultraman and OpenAI, accusing OpenAI of betraying its original nonprofit mission, creating a for-profit branch and colluding with its largest investor, Microsoft, to dominate the development of artificial intelligence.

One of the main obstacles to OpenAI's transition to a for-profit organization is to determine reasonable value for nonprofits, which under the current structure controls the company. OpenAI, a private company, is negotiating to raise new funds at a pre-investment valuation of $260 billion, but it is not obliged to sell it.

Musk's bid sets a high bar, which could mean that he or the person who runs the nonprofit will eventually own a large stake in the new OpenAI, or maybe even a controlling stake.

As well, according to people familiar with the matter, OpenAI had discussed valuation of nonprofit entities at approximately US$30 billion as part of the company's for-profit conversion. Musk's lawyers believe that the number should be much higher and demanded a bid. A higher valuation also means Musk will receive greater returns, and his investment in the early stages of the company will receive several times the return.

Musk's own artificial intelligence company xAI is supporting the bidding, and the company may merge with OpenAI after the deal is concluded. Musk also received support from some investors, including 8VC, a venture capital firm led by Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital and Palantir co-founder Joe Lonsdale. Ari Emanuel, CEO of Hollywood company Endeavor, also backed the proposal through his investment fund.

Musk and other critics said they believe that OpenAI may underestimate the nonprofit’s value after it is spin-off. OpenAI said Musk's legal claims were unfounded and overwhelming, and said the nonprofit would acquire the full equity value of the for-profit. In a document released last December, the company said Musk had previously supported the transformation of OpenAI into a for-profit company, but gave up because he could not gain control.

Even before Musk took the latest move, OpenAI faced numerous obstacles in transforming charities into for-profit companies. Competitor Meta Platforms wrote to California's Attorney General in December last year, expressing opposition to the plan. Additionally, OpenAI is negotiating with Microsoft and other stakeholders on how much equity they should acquire in the new company.

OpenAI has promised to complete the transition by the end of 2026. Because of the horseSker's bid has sparked uncertainty over the company's future, and the effort may become more difficult.