Elon Musk is spearheading a US$97.4 billion bid to acquire the artificial intelligence powerhouse OpenAI, thereby intensifying his long-standing dispute with the company and its CEO Sam Altman, according to multiple reports.

The move, led by Musk and a consortium of high-profile investors, signals a broader clash over OpenAI’s transition from a non-profit to a commercial entity and shapes the future of open-source AI emerging from the US.

Musk’s offer to OpenAI and its implications

Musk’s consortium – which includes xAI, Baron Capital Group, Valor, Atreides, Vy Capital, 8VC, and an investment fund led by Endeavor CEO Ari Emanuel – has formally submitted the bid to OpenAI’s board.

The proposal seeks to purchase all of OpenAI’s assets, with funds directed towards preserving its original charitable mission.

The timing of Musk’s bid is significant. OpenAI is restructuring to secure long-term capital and maintain its competitive edge in the fast-evolving AI sector.

The company argues that its non-profit structure limits its ability to compete with deep-pocketed rivals.

Under its current plan, OpenAI aims to finalise its transformation by 2026, a move that Musk and his allies view as a deviation from the organisation’s founding principles.

A battle of philosophies in the AI space?

Musk, a co-founder of OpenAI who departed in 2019, has been openly critical of the company’s trajectory. His new AI venture, xAI, operates on an open-source model, a stark contrast to OpenAI’s growing commercial ambitions.

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

Adding fuel to the fire, Altman swiftly dismissed the bid with a sharp response on X: “No thank you but we will buy twitter for $9.74 billion if you want.”

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

— Sam Altman (@sama) February 10, 2025

Musk, who acquired Twitter (now X) in 2022 for $44 billion, retorted with “Swindler” and later referred to Altman as “Scam Altman.”

Beyond personal clashes, the battle over OpenAI represents a critical struggle over the future of AI governance.

Musk’s legal team argues that if OpenAI’s leadership shifts to a profit-driven model, the non-profit entity should be adequately compensated for relinquishing control over one of the most transformative technologies in history.

Strategic stakes in AI and politics

The power play unfolds against the backdrop of increasing AI investments and regulatory scrutiny.

OpenAI has secured backing from Microsoft and is in discussions with SoftBank for a potential $40 billion investment at a $260 billion valuation.

Additionally, OpenAI is part of Stargate, a $500 billion AI initiative endorsed by Donald Trump, a project in which Musk’s xAI is notably absent.

Before all this, Musk – who is a close Trump adviser – has filed lawsuits against OpenAI, alleging antitrust violations and seeking to prevent its shift to a for-profit model. His legal team has urged attorneys general in California and Delaware to open OpenAI to external bids, a move that could escalate the conflict further.

The outcome could reshape the AI landscape, influencing investment flows, regulatory approaches, and corporate governance models in the sector.

Also Read: If Elon Musk's X is 'barely breaking even,' could AI be the answer?

As OpenAI navigates this high-stakes corporate battle, business and HR leaders should pay close attention.

Should Musk’s bid succeed, it would mark a dramatic reversal of OpenAI’s trajectory.

The acquisition would likely reinstate the company’s commitment to open-source AI development, aligning it more closely with Musk’s vision.

The move could disrupt OpenAI’s existing partnerships, particularly its deep ties with Microsoft, which has invested billions into the firm.

For investors, a Musk-led OpenAI could mean a shift in business strategy – from revenue-driven commercialisation to a more research-oriented and publicly accessible AI model.

While this might appeal to AI ethicists and open-source advocates, it could create friction with financial backers expecting commercial returns.

From a regulatory perspective, Musk’s control over OpenAI would further consolidate his influence across AI, space, and social media industries.

Given his existing legal battles over AI governance, an acquisition could trigger new antitrust scrutiny, particularly if it affects competition in AI development.

From an HR lens, this shift could impact OpenAI’s talent retention and hiring strategies.

The company currently attracts top-tier AI researchers with competitive salaries and commercial incentives.

A move towards an open-source model could alter compensation structures and employee expectations, potentially causing talent migration to other AI firms with stronger financial incentives.

Ultimately, if Musk gains control, OpenAI would likely pivot away from its current corporate structure, redefining how AI innovation is commercialised and accessed.

The global AI race would enter uncharted territory, with significant implications for businesses relying on AI-powered solutions.