Elon Musk’s OpenAI Offer: A Small Hurdle in the Nonprofit’s Profit Pursuit

When Elon Musk bought Twitter for $44 billion at the end of 2022, few thought this acquisition would cascade into the Trump-Musk alliance and the subsequent DOGE-powered revelations of massive government waste, corruption, and fraud.

A similar move of significance is potentially in the works, as Elon Musk offered an unsolicited bid of $97.4 billion to buy OpenAI, the purportedly non-profit company behind the ChatGPT AI model. 

At press time, the CEO of OpenAI, Sam Altman, responded in a mocking tone, implying that it was a bad call for Musk to buy Twitter in the first place, “no thank you but we will buy twitter for $9.74 billion if you want”.

Musk’s bid for OpenAI comes on the heels of the Stargate AI initiative purportedly worth $500 billion. Although President Trump hosted OpenAI, SoftBank and Oracle leaders before the public to represent the project, Elon Musk seems to think Stargate is a house of cards. When the Financial Times reported that Stargate has actually little funding and structure, Musk readily reply-quoted the article’s findings.

But what’s really going on with the Musk-Altman rivalry?

Automating Ideological Enforcement: Cleavage between Musk and Altman

Before anything else, artificial intelligence (AI) as it is currently developed should be understood as a base layer to analyze, manage and filter content. This is a tremendous achievement as all prior narrative management systems relied on content-gatekeeping nodes such as media companies.

Transitioning from nodes to an interactive layer, AI is far more agile and powerful as people directly interact with this layer that manifests in different wraps (apps). In turn, AI can react to user input on the fly, affecting the thought processes of billions in ways previously unimaginable. 

And because all power structures necessitate content management, AI represents the holy grail for future governance. This is why Senate Majority Leader Chuck Schumer (D-NY) was so quick to establish the U.S. Artificial Intelligence Safety Institute.

Elon Musk, no stranger to government contracts, but also a political actor after buying Twitter, has strong opinions on AI’s ideological makeup:

• Called out OpenAI’s ChatGPT as “too woke” and “is being trained to be politically correct”.
• Called out Google’s Gemini as having “insane racist, anti-civilizational programming”.

Of course, because Grok has been trained on content provided largely by content-gatekeeping nodes, it is often difficult to see major differences between ChatGPT and Grok, as Sam Altman pointed out.

However, the impetus behind Elon Musk’s Grok has been to become “maximum truth-seeking AI that tries to understand the nature of the universe.” What that actually translates into is less important than the fact Musk sees Big Tech AI, including OpenAI in a tight relationship with Microsoft, as one that needs to be countered.

Therefore, that countering effort is the underlying driver behind Musk’s bid to buy OpenAI.

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OpenAI: Elon Musk’s Failed Influence Attempt

All the way back in 2015, Elon Musk was alongside Sam Altman as OpenAI co-chairs, among 11 others. Interestingly, Peter Thiel of PayPal and Palantir was one of the major backers. However, so was venture capitalist Reid Hoffman. Altogether, they elevated OpenAI’s funds to $1 billion, as then non-profit AI research organization.

These billionaires are often portrayed as being on the opposite side of the political spectrum, but it is unclear if their ideological differences can be meaningfully gleaned. Fast forward to 2018, and Elon Musk left OpenAI’s board of directors. OpenAI’s site framed Musk’s departure in the following manner:

“As Tesla continues to become more focused on AI, this will eliminate a potential future conflict for Elon.”

Some outlets speculated that Musk attempted to take control of OpenAI, but was met with stiff resistance from Altman and other co-chairs. Whatever the case may be, OpenAI transformed into a “capped-profit” entity soon after, in 2019.

This peculiar business model allows investors to gain returns, but capped at 100x their investment. Eventually, it paved the way for Microsoft’s heavy involvement, as the Big Tech giant infused the AI startup with $13 billion worth of capital as of late 2024.

In turn, Microsoft’s entire AI push, via Copilot AI, relies on the refined ChatGPT large language model. Most recently at the end of 2024, OpenAI announced its plan to ditch the “capped” part and become for-profit, although this was framed in peculiar terms as “A stronger non-profit supported by the for-profit’s success”.

“We have a non-profit and a for-profit today, and we will continue to have both, with the for-profit’s success enabling the non-profit to be well funded, better sustained, and in a stronger position for the mission.”

Over a year prior, in July 2023, Elon Musk officially announced his counter AI startup, xAI, with Grok as the “anti-woke” AI to combat ChatGPT proclivities. In the meantime, in addition to calling Sam Altman a liar for taking OpenAI equity in contrast to his Congress testimony, Musk sued OpenAI in February 2024 for prioritizing profits. Yet, he dropped the lawsuit in June, just before OpenAI’s scheduled hearing to dismiss the case.

The sudden lawsuit drop may have been related to OpenAI releasing internal correspondence, allegedly showing that Musk aimed for a much bigger profit drive, “This needs billions per year immediately or forget it.” 

The drama continued in August, however, when Musk erected another lawsuit against OpenAI, stating that Altman and associates “intentionally courted and deceived Musk, preying on Musk’s humanitarian concern about the existential dangers posed by artificial intelligence”.

The Bottom Line

The future of governance, spanning ideological, economic, military and political frameworks, will likely be reliant on content wrappers, as technologies that organize, filter and deliver content. Palantir’s AI already showcased how it can be deployed in real-world scenarios. 

The battle for OpenAI, however, is a mirror of a broader struggle to dominate the development of generalized AI applications. Inherently, it is not only a political struggle, but a first-mover advantage struggle from an economic standpoint.

But now that Elon Musk revealed his intentions after aligning with President Trump, and made clear his intentions with the DOGE initiative which unraveled patronage networks, rival power networks are less likely to accept his bid as it happened with Twitter.

Do you think it is possible for any AI company to be transparent in their LLM training? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.