Elon Musk's Astonishing $97 Billion Offer to OpenAI: Cause and Consequences
Not a day goes by that we don't hear Elon Musk's name. This time, however, it was Musk's offer to buy all of OpenAI's assets that attracted attention. This huge $97 billion offer brought OpenAI's controversial transformation from a non-profit to a for-profit company to the agenda once again.
OpenAI's Transition from Not-for-Profit Status to For-Profit Model
OpenAI was originally founded in 2015 as a non-profit organization with the mission "to ensure that artificial general intelligence benefits all of humanity". Over time, however, it has become clear that developing powerful AI models requires enormous amounts of investment.
For this reason, OpenAI switched to a "capped profit" model, where investors could earn returns of up to 100 times their initial investment, but all returns beyond that would be used for the benefit of humanity. But this model was rocked by a major crisis in November 2023. OpenAI's CEO Sam Altman was ousted by the board of directors, but he returned after a mass resignation threat from the company's employees. This event strengthened the possibility of the company turning into a purely for-profit company in line with investors' demands.
Critical Move by Elon Musk
Elon Musk has been critical of OpenAI's transformation from a non-profit to a for-profit company from the beginning. As one of OpenAI's co-founders, Musk left the company due to leadership disputes and has since described the company's transformation as a "secret plan to gain power and wealth". Musk even filed a lawsuit against OpenAI, claiming that Altman and his team "systematically stole valuable technology and personnel from a company that started as a charity in order to get rich."
The $97 billion offer demonstrated Musk's serious concerns about OpenAI and was a touchstone for those who questioned the market value of OpenAI's assets.
Market Assessment and Future Scenarios
OpenAI's conversion from a non-profit to a for-profit company is a legally complex process. In this conversion, the new for-profit company needs to buy all rights and assets from the non-profit organization.
The problem is that determining the value of these assets is highly speculative. If OpenAI does indeed develop "superintelligence", the return on investment will inevitably exceed 100 times, while in another scenario it could be close to zero.
Herein lies the importance of Elon Musk's $97 billion offer: It questions OpenAI's nonprofit board's plan to sell the company's assets for the relatively low price of $40 billion, and makes a good case that this process should take place at a fair market price.
