In a striking rebuke to Elon Musk, OpenAI CEO Sam Altman recently rejected a $97.4 billion acquisition bid led by Musk and his AI startup, xAI.

Long-Running Tech Feud

Altman’s decision has intensified the long-running feud between the two tech giants, bringing into focus their starkly different visions for the future of artificial intelligence (AI). With Musk levelling accusations of self-dealing and Altman responding with sharp jabs, the saga has left the tech industry and AI users questioning what comes next.

What Happened?

Musk’s unsolicited bid for OpenAI (revealed through legal filings and media reports) was supported by private equity firms Baron Capital Group and Valor Management. The proposal sought to acquire the non-profit entity that controls OpenAI, with Musk’s legal team arguing that OpenAI’s shift towards a for-profit structure contradicted its original mission.

As Musk’s attorney, Marc Toberoff, put it: “If Sam Altman and the present OpenAI board of directors are intent on becoming a fully for-profit corporation, it is vital that the charity be fairly compensated for what its leadership is taking away from it: control over the most transformative technology of our time.”

However, OpenAI swiftly dismissed the offer. In fact, Altman took to Musk’s own platform, X (formerly Twitter), to publicly rebuff the bid with a characteristically cheeky retort, saying: “No thank you, but we will buy Twitter for $9.74 billion if you want.” OpenAI board chair Bret Taylor reinforced the company’s stance, stating, “OpenAI is not for sale.”

Musk then fired back with some accusations, branding Altman as a “swindler” and claiming OpenAI had abandoned its founding principles in favour of corporate profit.

Musk’s Motivation and the OpenAI Backstory

The world’s richest man, Elon Musk, who co-founded OpenAI in 2015 alongside Altman, was one of its earliest financial backers. However, he left the board in 2018 following disagreements over the company’s direction and later launched his own AI startup, xAI, in 2023. Since then, he has been an outspoken critic of OpenAI, particularly regarding its partnership with Microsoft.

Musk’s lawsuit against OpenAI, first filed in February 2024 and later revived in August, accuses the company of prioritising profit over safety and betraying its original commitment to open-source AI development. The lawsuit argues that OpenAI has become a “closed-source de facto subsidiary” of Microsoft, which has invested over $13 billion in the company.

Musk said in a statement explaining his bid: “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.”

OpenAI Says It Was Necessary

OpenAI, however, contends that its evolution into a public benefit corporation was necessary to secure the capital needed to develop cutting-edge AI models. Interestingly, internal emails published by OpenAI last year revealed Musk had previously acknowledged the necessity of attracting significant investment to fund AI infrastructure.

Musk’s Growing Problems in Business and Politics

The rejection of Musk’s bid comes at a time of mounting challenges for the billionaire across his now sprawling empire. For example, Tesla, his most well-known EV venture, has seen its stock plummet by over 31 per cent since December 2024, amid declining sales and growing criticism of what many see as Musk’s divisive political interventions. Analysts have attributed Tesla’s downturn in part to Musk’s polarising behaviour (e.g. ‘that’ salute, which alienated not just his environmentally conscious consumers, who were once the company’s core supporters).

Also, his social media platform, X, continues to struggle, with its valuation reportedly falling by over 50 per cent since he purchased it for $44 billion in 2022. A combination of mass layoffs (reducing staff by 80 per cent) and controversial content moderation policies has driven advertisers away, with Bluesky and Threads, contributing to X’s financial woes.

Musk’s huge $227 million spend on Trump’s election campaign (and his wealth increasing by a reported $170 billion since) plus his increasing entanglement with the US government have also sparked concerns about conflicts of interest. Also, as the head of the Department of Government Efficiency (DOGE) under President Trump’s administration, Musk has been widely criticised over his wielding of influence over federal agencies that regulate his businesses (including those that could investigate him). In fact, Musk’s DOGE team is now being investigated by the US government watchdog over its access to the Treasury’s payments system, which has been described as unconstitutional. In recent months, investigations into Tesla and SpaceX have been quietly shelved following the departure of key regulators, raising eyebrows in Washington and beyond.

Adding to the controversy, Musk recently conducted a White House interview alongside his son and President Trump, an appearance that critics claim blurred the lines between political advocacy and personal business interests. The interview, perceived by many as an attempt to shore up support for his ventures, has drawn scrutiny over whether Musk’s access to political power gives him an unfair advantage over his competitors.

What It All Means for OpenAI, Musk, and AI Users

For OpenAI, turning down Musk’s offer signals a firm commitment to its current trajectory. Despite Musk’s claims that OpenAI has lost sight of its original mission, the company maintains that its hybrid non-profit and for-profit model allows it to raise the funding necessary to develop safe and powerful AI. This decision also ensures OpenAI retains its independence from Musk’s influence, allowing it to continue its deep partnerships with Microsoft and other investors.

For Musk, the somewhat humiliating public rejection represents a significant setback in his efforts to steer the direction of AI development. With OpenAI remaining out of reach, Musk’s xAI faces more of an uphill battle in competing with OpenAI’s dominant ChatGPT and the backing of Microsoft. His mounting legal battles, combined with declining public confidence in his leadership, may further strain his ability to expand xAI’s influence in the AI sector.

As for users, the outcome of this feud will have lasting implications. OpenAI’s continued autonomy ensures stability in its AI offerings, but Musk’s persistent attacks raise questions about regulatory oversight and ethical AI governance. Meanwhile, the turbulence surrounding Musk’s ventures, from Tesla to X, may further shape consumer trust and industry dynamics in the coming months.

What Does This Mean for Your Business?

Sam Altman’s rejection of Elon Musk’s audacious $97 billion bid marks yet another defining moment in what is an ongoing power struggle over the future of artificial intelligence. OpenAI’s decision to remain independent reinforces its commitment to a hybrid model that balances innovation with commercial viability, even as Musk continues to frame this approach as a betrayal of the organisation’s original mission. While the tech world is no stranger to high-profile disputes, this particular clash holds deeper implications, not just for AI development but also for the regulatory and ethical landscape surrounding it.

For Musk, the rejection highlights the mounting challenges he faces in both the business and political spheres. His attempt to bring OpenAI under his control appears to have been a strategic move to counteract the growing influence of Microsoft and reassert his own role in shaping AI’s future. However, his declining public perception, ongoing legal battles, and the struggles of his various ventures suggest that he is facing headwinds unlike any before. While xAI may still emerge as a formidable competitor, OpenAI’s ability to operate without Musk’s intervention has, for now, reinforced its market dominance.

For business users, this standoff between two of the most influential figures in AI raises significant considerations. OpenAI’s continued partnership with Microsoft should ensure stability in its product offerings, giving enterprises confidence that ChatGPT and other AI models will continue to develop without abrupt strategic shifts. This means businesses relying on OpenAI’s technology can probably expect further refinements, better integration with Microsoft products, and sustained investment in safety and governance frameworks. However, Musk’s criticisms of OpenAI’s closed-source nature may also fuel discussions about transparency and accessibility, potentially pushing regulators and competitors to advocate for more open AI ecosystems.

While this latest chapter in the Musk-Altman rivalry has made headlines, the broader impact will be felt in how AI is shaped moving forward. OpenAI’s stance suggests that it remains committed to its vision, even as Musk continues to challenge its direction. Whether this leads to a more competitive AI marketplace or a further entrenchment of power among a select few remains to be seen, but for now, OpenAI has made its position clear, i.e. that it’s not for sale, not even to one of the world’s richest and most controversial figures.