OpenAI CEO Sam Altman shot down Elon Musk’s reported offer to buy the company behind ChatGPT, escalating a battle with the X owner over the AI firm’s for-profit pivot that could shape Hollywood’s adoption of the technology.
“No thank you but we will buy twitter for $9.74 billion if you want,” Altman wrote in a post on X Monday afternoon.
Musk was part of a group of investors who made a $97.4 billion offer to buy the nonprofit company that controls OpenAI, The Hollywood Reporter has confirmed. Other investors in the consortium include Endeavor CEO Ari Emanuel through his investment firm, Emanuel Capital Management, Baron Capital Group, Valor Management, Atreides Management, Vy Fund III and Eight Partners VC.
“If Sam Altman and the present OpenAI, Inc. Board of Directors are intent on becoming a fully for-profit corporation, it is vital that the charity be fairly compensated for what its leadership is taking away from it: control over the most transformative technology of our time,” said Marc Toberoff, the attorney representing the investors, in a statement.
Musk is the “person best positioned to protect and grow OpenAI’s technology,” Toberoff stressed, as cofounder of the company and the “most innovative and successful tech industry leader in history.”
In the entertainment industry, utilization of AI tools in the production pipeline is positioned to be the next battleground between creators and studios. With the introduction of Sora, capable of creating hyperrealist videos with a prompt of just a couple sentences, OpenAI is courting the industry amid the rise of the technology.
Emanuel’s inclusion in the consortium of investors may signal Musk’s interest in wooing Hollywood if he were to buy the nonprofit that controls OpenAI. AI tools could have major applications in postproduction, namely visual effects, though adoption is currently constrained by legal uncertainty around copyright issues.
Musk’s ties to OpenAI can be traced back to 2015, when he cofounded the company with Altman alongside a group of other prominent Silicon Valley investors. The X owner left the board in 2018 due to a potential conflict of interest with Tesla, which he owns and was ramping up its focus on AI.
Last year, Musk reignited a legal battle against OpenAI over its for-profit pivot. He alleged fraud and breach of contract in a lawsuit saying he was swindled when he invested roughly $45 million into the AI venture, which he said betrayed its original mission to safely develop the technology “for the benefit of humanity.” In Musk’s telling, Altman illegally partnered with Microsoft to establish a web of illicit affiliates and plunder its nonprofit arm of assets and staff in violation of their deal.
In January, Toberoff sent a letter to the attorneys general in California and Delaware urging them to allow an “open, competitive bidding” process in the sale of the nonprofit that oversees OpenAI. It concerns revolve around the possibility of the company undervaluing the nonprofit when it’s spun out.
“As we understand the OpenAI, Inc. Board’s present intentions, they will give up majority ownership and control over OpenAI’s entire for-profit business in exchange for some minority share of a new, consolidated for-profit entity. Who on Earth would make that trade?” Toberoff said. “If the Board is determined to relinquish OpenAI, Inc.’s assets, it is in the public’s interest to ensure that OpenAI, Inc. is compensated at fair market value. That value cannot be determined by insiders negotiating on both sides of the same table. After all, the public is OpenAI, Inc.’s beneficiary, and a sweetheart deal between insiders does not serve the public interest.”
Toberoff added that Musk will consider matching or exceeding higher bids than the $97.4 billion the consortium of investors proposed.
As of October, when OpenAI completed its latest funding round, the company was valued at $157 billion. However, The New York Times reported that OpenAI was about to complete a new funding round of $40 billion, which would value the company at $300 billion.
The company has also received investment from and partnered with Microsoft on developing artificial intelligence technology, which includes the popular chatbot ChatGPT. The company has made a number of deals with publisher including Time, Condé Nast, and News Corp., but is also facing lawsuits from The New York Times and other authors, who argue that the data used to train its models was illicitly or inappropriately obtained,
On President Donald Trump‘s first full day in office in January, he made a deal with Altman as well as Oracle founder Larry Ellison and SoftBank chief Masayoshi Son to invest $500 billion in an artificial intelligence project called Stargate, with a plan to build campuses that can provide energy for more powerful artificial intelligence tools.