A group of investors led by Elon Musk’s x.ai has submitted a $97.4 billion bid to acquire OpenAI this week. OpenAI CEO Sam Altman has dismissed the proposal, arguing that it would hinder OpenAI’s planned conversion from a nonprofit to a for-profit organization, a goal that Musk is attempting to block in a lawsuit.

Altman’s lawyers have stated that Musk cannot have both a stake in the purchased assets and also try to prevent the organization from changing its nonprofit status.

The full letter of intent from Musk’s team to buy OpenAI was made public as part of these filings, providing insight into the ongoing dispute.

Clear Deadline Set

The unsolicited offer from Musk’s group includes a specific expiration date: May 10, 2025. There are exceptions to the deadline if the deal is finalized, both sides agree to end discussions, or OpenAI formally rejects the offer in writing.

Despite Altman’s dismissals, OpenAI’s board has not formally rejected the offer yet, as boards typically need to evaluate such offers, even from competitors.

All-Cash Transaction

Musk’s consortium, which includes investors like Joe Lonsdale’s 8VC and SpaceX investor Vy Capital, is offering exactly $97.375 billion to buy out OpenAI. They claim that 100% of the purchase price will be paid in cash.

This is notable, as Musk has not shied away from borrowing money in the past, taking out $13 billion from banks to buy Twitter (now X) in 2022. His net worth has increased substantially since then, reaching an estimated $400 billion.

However, the letter states that the offer is not funded by Musk himself, but rather by a consortium of investors.

Full Access to Books and Personnel

Prior to the purchase, the buyers want to examine OpenAI’s financial and business records, as well as gain access to OpenAI staff for interviews. This involves reviewing everything from “assets, facilities, equipment, books, and records.

While this is a standard part of due diligence, especially for an offer of this magnitude, this could also grant Musk’s x.ai, an OpenAI competitor, access to sensitive internal information. Furthermore, once they have seen it all, their diligence could also provide a reason for them to withdraw their offer.

The Offer Could Undermine Musk’s Lawsuit

The $97.4 billion bid to acquire OpenAI contradicts Musk’s claim that the startup’s assets cannot be transferred away for private use, according to OpenAI’s lawyers in a court filing.

OpenAI has suggested that the bid is not serious and is an attempt to undermine a competitor, but Musk’s consortium says their offer is genuine and that the cash would go to OpenAI’s nonprofit to further its mission.

Musk May Withdraw If OpenAI Stays a Nonprofit

Musk’s legal team states that he will withdraw his bid to acquire OpenAI if the board commits to keeping it as a nonprofit, according to a court filing.

The filing argues that Musk’s buyout offer is a genuine one, stating that the nonprofit should receive fair market value for its assets based on what an independent buyer would pay.

This seems to validate what some pundits have alleged: that the offer was meant to drive up the price that Altman would have to pay to take the company private.

In a statement, the lawyer representing OpenAI’s board stated that Musk’s bid “does not set a value for [OpenAI’s] nonprofit” and that the nonprofit is “not for sale.”

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