OpenAI Rejects $97.4 Billion Acquisition Bid
Deal News | Feb 17, 2025 | EIN
The board of directors at OpenAI has officially declined a $97.4 billion acquisition offer from a consortium led by billionaire Elon Musk. This proposal involved a group that includes xAI, Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, and 8VC, and sought to prevent OpenAI from becoming a commercial entity. This development follows long-standing disagreements between Elon Musk and OpenAI CEO Sam Altman over the organization's direction in AI technology. The acquisition, if successful, could have led to a merger between OpenAI and Musk's xAI, jeopardizing the ongoing fundraising and transformation plans of OpenAI into a commercial enterprise. The deal also faces antitrust scrutiny and the necessity for Musk and his partners to muster significant financial resources. OpenAI continues its efforts to procure funds, with deliberations involving SoftBank Group Corp. for an extensive $300 billion financing round.
Sectors
- Artificial Intelligence
- Venture Capital
- Technology
Geography
- United States – The key participants, including OpenAI, Elon Musk, and the consortium members, are primarily based in the US.
Industry
- Artificial Intelligence – OpenAI, at the center of the article, is heavily involved in AI research and operations.
- Venture Capital – The article involves several venture capital participants, including Valor Equity Partners and 8VC.
- Technology – The article discusses major tech companies and innovations, underscoring its focus on the technology sector.
Financials
- $97.4 billion – The proposed acquisition offer for OpenAI.
- $157 billion – The recent valuation of OpenAI.
- $300 billion – Potential financing round being negotiated with SoftBank Group Corp.
- $40 billion – Valuation of Elon Musk's AI startup, xAI.
- $6 billion – Funds raised by xAI in a recent round.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| OpenAI | Target Company | Company | A leading artificial intelligence research and implementation company. |
| Elon Musk | Bidder | Person | Billionaire entrepreneur leading an acquisition consortium. |
| xAI | Consortium Member | Company | AI startup founded by Elon Musk, part of the bidding consortium. |
| Valor Equity Partners | Consortium Member | Company | A private equity investment firm involved in the acquisition bid. |
| Baron Capital | Consortium Member | Company | An investment management firm part of the acquisition consortium. |
| Atreides Management | Consortium Member | Company | Investment firm involved in the consortium led by Musk. |
| Vy Capital | Consortium Member | Company | An investment company included in Musk's acquisition consortium. |
| 8VC | Consortium Member | Company | A venture capital firm part of the consortium bidding for OpenAI. |