Elon Musk threatens to withdraw $97.4 billion OpenAI bid if nonprofit status is maintained

Elon Musk has announced that he will withdraw his staggering $97.4 billion bid for OpenAI’s nonprofit arm if the artificial intelligence research firm decides to halt its transition into a for-profit entity. This development, disclosed in a legal filing submitted Wednesday to the U.S. District Court for the Northern District of California, underscores a heated dispute over OpenAI’s future direction.

“If OpenAI, Inc.’s Board is prepared to preserve the charity’s mission and stipulate to take the ‘for sale’ sign off its assets by halting its conversion, Musk will withdraw the bid,” the filing stated. “Otherwise, the charity must be compensated by what an arms-length buyer will pay for its assets.”

The bid, spearheaded by Musk alongside his AI company xAI and a consortium of investors, accuses OpenAI and its CEO, Sam Altman, of deviating from the organization’s original mission. Musk contends that OpenAI, which was established in 2015 as a nonprofit, is now prioritizing profit over its founding principle of developing AI for the greater good. The firm transitioned to a “capped profit” model in 2019, a move that Musk has openly criticized.

Altman swiftly dismissed the bid, stating in an interview with CNBC that it is nothing more than an attempt by Musk to “slow down a competitor.” He further downplayed the seriousness of the offer, remarking on Tuesday that he is “not particularly” concerned about it.

Musk, who was an original co-founder of OpenAI and contributed approximately $50 million to its early development, has been vocal about his disappointment with its shift toward commercialization. Since leaving the company’s board in 2018, the Tesla and SpaceX CEO has repeatedly criticized OpenAI for prioritizing revenue generation over its initial nonprofit mission.

During a virtual appearance at the World Governments Summit in Dubai on Thursday, Musk reiterated his concerns. Responding to a question from the UAE’s Minister of Artificial Intelligence, Omar Al Olama, about whether OpenAI could truly scale as a nonprofit, Musk responded:

“I think the evidence was there in that OpenAI has gotten this far while having at least a sort of dual profit, nonprofit role. What they’re trying to do now is completely delete the nonprofit. And that seems really going too far.”

He went on to compare OpenAI’s transformation to a conservation nonprofit turning into a logging company.

“I provided all of the funding for OpenAI for the first almost $50 million for nothing, as a nonprofit, and it was meant to be open source,” Musk emphasized. “And so, you know, I think this is analogous to, like... if you fund a nonprofit to preserve the Amazon rainforest, but then... instead they turn into a lumber company and chop down the trees and sell them for wood.”

He even suggested a rebranding for OpenAI, sarcastically proposing names such as “maximum profit AI” or “closed for voracious profit.”

OpenAI has yet to issue an official response to Musk’s latest comments. However, Altman previously explained in December that the shift to a capped-profit structure was partly due to Musk’s decision to stop funding the organization. Proponents of OpenAI’s transition to a fully for-profit public benefit corporation—which is expected to take two years—argue that it will allow the company to scale more effectively and attract greater investment.

Musk’s challenge to OpenAI raises important questions about the balance between financial sustainability and maintaining ethical AI development. As the dispute unfolds, the future of OpenAI’s structure and mission remains uncertain, with the potential to reshape the AI landscape for years to come.