Altman rejects Musk’s $97.4 billion buyout bid, calls it an “improper” move to undermine OpenAI

The courtroom battle between Elon Musk and Sam Altman over the future of OpenAI has escalated, with Musk’s $97.4 billion buyout offer becoming a key point of contention.

In a court filing Wednesday, Altman argued that Musk’s all-cash offer contradicts his own lawsuit, which claims that OpenAI’s assets cannot be transferred for private gain. Meanwhile, Musk countered by stating that he would withdraw his bid if OpenAI remains a nonprofit charity.

Background of the dispute

The conflict between the two billionaires dates back to last year, when Musk sued OpenAI to challenge its transition from a nonprofit to a for-profit company. He also alleged that the company’s relationship with Microsoft violated antitrust laws.

Musk’s latest unsolicited buyout offer, submitted on February 10, is backed by wealthy investors aiming to acquire OpenAI. However, Altman dismissed the offer, calling it an attempt to “slow us down” and reaffirming that OpenAI is “not for sale”.

Musk: OpenAI’s board has a fiduciary duty

Musk’s legal team responded by claiming that Altman rejected the offer before OpenAI’s board had even reviewed it, which they argue is a breach of fiduciary duty.

According to Musk’s lawyers, if OpenAI truly wants to maintain its nonprofit mission, then it should halt its restructuring.

“If OpenAI’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.”
— Musk’s legal team

However, if OpenAI continues its transition to a for-profit model, Musk’s team insists that “the charity must be compensated by what an arms-length buyer will pay for its assets.”

OpenAI: Musk contradicts his own lawsuit

OpenAI, in its court filing, accused Musk of contradicting his legal stance by trying to buy the company himself.

“Out of court, those constraints evidently do not apply, so long as Musk and his allies are the buyers.”
— OpenAI’s filing

The company emphasized that Musk’s offer directly conflicts with his claim that OpenAI’s assets should not be transferred for private gain.

Judge skeptical of Musk’s argument

US District Judge Yvonne Gonzalez Rogers, who is presiding over the case, expressed skepticism about Musk’s request to immediately block OpenAI’s restructuring.

During a February 4 hearing, she stated that she was reluctant to intervene in what she called a “billionaires versus billionaires” dispute. She also described Musk’s argument that he faced “irreparable harm” as a “stretch”.

While Rogers may allow Musk to take OpenAI to trial, she has indicated that the earliest trial date would be in late 2026.

What’s next?

The legal battle over OpenAI’s future is far from over. If Musk’s lawsuit succeeds, it could block OpenAI’s restructuring and disrupt its relationship with Microsoft. However, if OpenAI prevails, it will be free to continue its transition into a for-profit AI powerhouse.

For now, the case remains in the US District Court, Northern District of California (Oakland) under the title Musk v. Altman, 24-cv-04722.