Musk Leads Group of Investors Making a Bid for OpenAI

You may have noticed that Elon Musk and Sam Altman don’t seem to get along, to put it mildly. Musk was one of the founders of OpenAI with Altman back in 2015 but left the open source company in 2018. Since then, OpenAI created a for profit subsidiary and started taking money from Microsoft.

Last year, Musk sued Altman and Open AI for trying to turn the company into a for-profit entity.

Mr. Musk sued OpenAI and its chief executive, Sam Altman, accusing them of breaching a contract by putting profits and commercial interests in developing artificial intelligence ahead of the public good. A multibillion-dollar partnership that OpenAI developed with Microsoft, Mr. Musk said, represented an abandonment of a founding pledge to carefully develop A.I. and make the technology publicly available.

“OpenAI has been transformed into a closed-source de facto subsidiary of the largest technology company, Microsoft,” said the lawsuit filed Thursday in Superior Court in San Francisco.

Last month, Altman appeared at the White House as part of an announcement of $500 billion in new AI spending dubbed Stargate. Musk, despite his support for Trump, was quick to criticize the plan the next day.

SoftBank has well under $10B secured. I have that on good authority.

— Elon Musk (@elonmusk) January 22, 2025

This led to pushback from Altman and some personal comments about him from Musk.

Sam is a swindler

— Elon Musk (@elonmusk) January 22, 2025

Altman literally testified to Congress that he wouldn’t get OpenAI compensation and now he wants $10 billion! What a liar. https://t.co/YpHvcm0WZa

— Elon Musk (@elonmusk) January 23, 2025

And that brings us to today when Musk is leading a group of investors offering nearly $100 billion to buy OpenAI.

A consortium of investors led by Elon Musk is offering $97.4 billion to buy the nonprofit that controls OpenAI, upping the stakes in his battle with Sam Altman over the company behind ChatGPT.

Musk’s attorney, Marc Toberoff, said he submitted the bid to OpenAI’s board of directors Monday.

The unsolicited offer adds a major complication to Altman’s carefully laid plans for OpenAI’s future, including converting it to a for-profit company and spending up to $500 billion on AI infrastructure through a joint venture called Stargate. He and Musk are already fighting in court over the direction of OpenAI.

“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk said in a statement provided by Toberoff. “We will make sure that happens.”

Altman responded on X with a snarky offer of his own.

no thank you but we will buy twitter for $9.74 billion if you want

— Sam Altman (@sama) February 10, 2025

The company may be valued much higher than $97 billion. The company put its own value at $157 billion last October. But the important thing is that the technology is growing fast. Yesterday Altman wrote a blog post saying the development of AI was exceeding the pace of Moore’s Law.

The cost to use a given level of AI falls about 10x every 12 months, and lower prices lead to much more use. You can see this in the token cost from GPT-4 in early 2023 to GPT-4o in mid-2024, where the price per token dropped about 150x in that time period. Moore’s law changed the world at 2x every 18 months; this is unbelievably stronger.

Altman also believe a milestone of Artificial General Intelligence is now on the horizon. And if achieved it would change the world dramatically and quickly.

The world will not change all at once; it never does. Life will go on mostly the same in the short run, and people in 2025 will mostly spend their time in the same way they did in 2024. We will still fall in love, create families, get in fights online, hike in nature, etc.

But the future will be coming at us in a way that is impossible to ignore, and the long-term changes to our society and economy will be huge. We will find new things to do, new ways to be useful to each other, and new ways to compete, but they may not look very much like the jobs of today…

We expect the impact of AGI to be uneven. Although some industries will change very little, scientific progress will likely be much faster than it is today; this impact of AGI may surpass everything else.

The price of many goods will eventually fall dramatically (right now, the cost of intelligence and the cost of energy constrain a lot of things), and the price of luxury goods and a few inherently limited resources like land may rise even more dramatically…

In particular, it does seem like the balance of power between capital and labor could easily get messed up, and this may require early intervention. We are open to strange-sounding ideas like giving some “compute budget” to enable everyone on Earth to use a lot of AI, but we can also see a lot of ways where just relentlessly driving the cost of intelligence as low as possible has the desired effect.

If Altman is right, the current battle between OpenAI and Musk isn’t just about who will own the company, it’s about who will potentially control the greatest disruption in society since the printing press. Read Altman’s post closely and you’ll see he’s saying we may only be a year or two away from a world in which machines know more than any individual human, even highly trained doctors and researchers. 

On the one hand this could bring huge benefits to science and medicine in record time. On the other hand it may also mean that most white collar jobs could be done better by a machine than a person. Once that happens, will we have an economy that employees people or will AI essentially seize the means of production from humanity? It’s hard to imagine what this could mean for not only our economy but our politics which are currently tied up in arguments over economic growth, unions and debt. What will become of those arguments in a world where there are no jobs for many people?