Elon Musk’s $97.4b Hostile Takeover Bid Complicates Openai’s Restructuring Plans. This offer comes from his AI company xAI and a group of investors. The offer, which was made public in a letter to the attorneys general of California and Delaware, aims to disrupt OpenAI’s current company restructuring.
Within hours, Sam Altman, CEO of OpenAI, turned down the offer. He wrote on X (formerly Twitter), “no thank you, but we will buy Twitter for $9.74 billion if you want.” The answer showed how deeply angry the two guys were at each other. Musk helped to start OpenAI but left the company years ago. Since then, he and Altman have had public and legal fights.
OpenAI’s Move to a New Company is in Danger
OpenAI started out as a non-profit in 2015. In 2019, it switched to a capped-profit plan to attract investors while keeping its mission-driven oversight. The charity is in charge of the for-profit OpenAI Global and is still bound by its original mission.
OpenAI is currently working on becoming a public benefit corporation (PBC), a type of organization that helps companies raise more money while still committing to bigger social goals. But this change is now being looked at more closely. Attorneys general in California and Delaware have asked for full information about the plans to restructure, and Musk’s involvement has made things even more difficult.
Pressures from Law and Government
Musk’s bid makes it hard for OpenAI’s charity board to do what’s right. Legal experts say the board needs to make sure it doesn’t undervalue the nonprofit’s assets, such as its valuable intellectual property and secret AI research. Even if OpenAI turns down Musk’s offer, it still has to officially evaluate it to show that it is meeting its obligations.
A lawyer who specializes in corporate governance named Stephen Diamond said that Musk’s action makes the board think about whether its plan to restructure OpenAI is too low-value:
“Musk is making things more difficult.” He is taking advantage of the charity board’s duty to not undervalue the asset.
The for-profit part of OpenAI is apparently getting ready for a funding round that will value the company at $260 billion. The nonprofit will have a 25% stake in the company. Because of this, Musk’s offer suggests that investors might be ready to give the nonprofit’s part of OpenAI a much higher value.
Reasons to Turn Down
Even though Musk’s offer is very big, OpenAI has several legal and political reasons to turn it down:
Threatening to Take Over: Since Musk is still suing OpenAI, the offer could be seen as a move to take over the company without Musk’s permission.
The fight is about more than just OpenAI and Musk’s personal feud. If Musk is able to delay or stop the restructuring, OpenAI might not be able to raise as much money, which could mean that its value has to be changed and present investors, like Microsoft, lose some of their money.
At the same time, Musk’s offer could be used as a standard for valuing assets, which would indirectly make OpenAI’s assets seem more valuable. This makes it harder for Altman to negotiate with backers, who are already trying to figure out how the nonprofit will be paid under the new corporate format.
The fight brings up an important question for lawmakers, investors, and the tech industry as a whole: who will be in charge of the future of artificial general intelligence, and how will that be protected?
Conclusion
Elon Musk’s $97.4b Hostile Takeover Bid Complicates Openai’s Restructuring Plans. Instead, it’s a strategy to make the company’s reorganization more difficult and draw attention to its leadership. Even though OpenAI is likely to turn down the offer, it has already changed the way people talk about the company’s future, value, and potential legal exposure.
The fight isn’t just about money; it’s also about who will be in charge of tools that could shape the next hundred years.