In a surprising move, Elon Musk and a consortium of investors have made a $97.4 billion all-cash offer to acquire OpenAI. This bid, detailed in a letter of intent, has sparked significant interest and speculation within the tech community. Here are the five key details revealed in Musk’s offer letter.
1. The Offer Amount and Structure
Musk’s consortium, which includes notable venture capitalists like Joe Lonsdale’s 8VC and SpaceX investor Vy Capital, is offering exactly $97.375 billion to buy out OpenAI. The letter specifies that 100% of the purchase price would be paid in cash. This is notable given Musk’s history of leveraging debt for acquisitions, such as the $13 billion borrowed to buy Twitter (now X) in 2022.
2. Clear Deadline Set
The unsolicited offer comes with a specific expiration date: May 10, 2025. This deadline can be extended if the deal is finalized beforehand, both sides agree to end discussions, or OpenAI formally rejects the offer in writing. Despite public dismissals from OpenAI CEO Sam Altman, including a joking counteroffer to buy X for a tenth of the price, OpenAI’s board has not yet formally rejected the offer.
3. Full Access to Books and Personnel
Before finalizing the transaction, Musk’s group wants to conduct thorough due diligence. This includes examining OpenAI’s financial and business records, as well as interviewing OpenAI staff. The letter mentions access to “assets, facilities, equipment, books, and records”. While this is a standard part of due diligence, it raises concerns about Musk’s AI company, x.AI, gaining access to sensitive internal information from a competitor.
4. Potential Impact on Musk’s Lawsuit
The $97.4 billion bid contradicts Musk’s legal claims that OpenAI’s assets cannot be “transferred away” for private gain. OpenAI’s lawyers argued in a recent court filing that Musk’s offer undermines his lawsuit, which aims to block OpenAI’s planned conversion from a nonprofit. Musk’s team has responded that they would withdraw the bid if OpenAI ceases its attempts to change its nonprofit status.
5. Consortium of Investors
The offer letter names seven investors, including Musk’s AI company x.AI, as well as unnamed “others.” This indicates that Musk is not solely relying on his personal fortune to finance the acquisition. The involvement of multiple investors suggests a broad base of support for the bid, potentially increasing its credibility and chances of success.
Elon Musk’s bold move to acquire OpenAI has introduced new dynamics into the ongoing rivalry between Musk and OpenAI’s CEO, Sam Altman. The offer, with its clear deadline, all-cash structure, and detailed due diligence requirements, highlights the seriousness of Musk’s intentions. As the May 10 deadline approaches, the tech community will be closely watching how this high-stakes drama unfolds.
What are your thoughts on Musk’s offer? Do you think OpenAI will accept it
