Musk's $97.4B OpenAI buyout letter reveals 5 key details

Silicon Valley's favorite grudge match just escalated from passive-aggressive tweets and lawsuits into a full-blown hostile takeover attempt.

A newly unsealed court filing reveals that a consortium led by Elon Musk's xAI submitted an unsolicited, all-cash offer to buy OpenAI for exactly $97.375 billion. OpenAI's board quickly slammed the door, unanimously rejecting the bid and stating the company is simply not for sale.

Altman brushed it off publicly by jokingly offering to buy X for a tenth of that price, prompting Musk to fire back by calling him a swindler.

Inside the 97 billion dollar offer sheet

The unsealed letter of intent lays out the exact blueprint Musk and his allies drew up to challenge Altman's empire.

For starters, it is a 100 percent all-cash transaction. Rather than leveraging his personal wealth or loading up on bank debt like he did with Twitter, Musk lined up serious venture backing, including xAI, Joe Lonsdale's 8VC, Vy Capital, Valor Equity Partners, and Baron Capital.

The bid came with a firm expiration date of May 10, 2025, but it carried heavy strings attached. Musk's team demanded complete access to OpenAI's books, records, facilities, and even direct interviews with staff for due diligence before closing.

The real tell, however, was buried in a Wednesday court filing. Musk's lawyers explicitly confirmed that he would drop the acquisition bid entirely if OpenAI formally abandoned its plan to convert into a for-profit entity.

A legal wrench in Altman's restructuring

Nobody seriously expected Sam Altman to hand the keys of OpenAI over to his biggest rival. The entire move appears designed to gum up OpenAI's corporate transition.

OpenAI is currently racing to restructure away from its nonprofit origins, an overhaul tied to a reported $40 billion investment from SoftBank at a staggering $260 billion valuation. Under nonprofit law, directors must ensure the public charity receives fair market value for its assets.

By dropping a concrete $97.4 billion all-cash bid on the table, Musk effectively set an aggressive benchmark. Even after rejecting the offer, OpenAI's board may still have to prove to courts and state regulators why Musk's cash valuation was not a superior deal for the charity compared to Altman's proposed spinoff.

Why it matters

For everyday ChatGPT users and developers building on OpenAI's APIs, nothing changes tomorrow. Your models will keep running, and services will stay online.

For the AI landscape, however, this feud introduces major friction into the sector's most aggressive capital-raising effort. If Musk's legal maneuver successfully stalls the nonprofit conversion, it could delay OpenAI's massive funding rounds and complicate its governance right as rivals are closing the model capability gap.

In our view, Musk played a remarkably shrewd, if cynical, tactical card. Offering all-cash backed by prominent funds makes it hard to dismiss as a pure joke, and demanding full internal access would have handed his competing startup xAI an unprecedented look under OpenAI's hood.

The obvious downside is credibility. Publicly claiming OpenAI's assets can never be privatized while concurrently submitting a multibillion-dollar buyout proposal exposes Musk to charges of legal hypocrisy that could easily backfire in front of a judge.