TMTPOST -- Elon Musk’s nearly $100 billion bid complicates OpenAI’s transition from a nonprofit organization to a for-profit corporation, but maybe a benefit for Microsoft Corporation, the largest investor of  the artificial intelligence (AI) star.

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OpenAI in December unveiled its plan to form a public benefit corporation (PBC), with ordinary shares of stock and the OpenAI mission as its public benefit interest, and make the form of for-profit company under the control of its existing non-profit entity. The entity would take the form of shares in the PBC at a fair valuation determined by independent financial advisors, thus resulting in one of the the best resourced non-profits in history, OpenAI said.

Musk’s $97.4 billion bid could force its board of directors to reassess how it is valuing the nonprofit, as it will be even more difficult for OpenAI to satisfy all the existing and potential investors if the bid set a higher value for the OpenAI’s assets, the Wall Street Journal commented. It noted OpenAI is negotiating how much equity Microsoft should get when the ChatGPT maker becomes a for-profit company, along with other backers, and investors that join in a new funding round of as much as $40 billion could expect entity following the transition.

The Wall Street Journal reported on Monday a group of investors led by Musk offered $97.4 billion to acquire the nonprofit that control OpenAI. Musk's bid is supported by his AI startup, xAI, which could merge with OpenAI if the deal goes through and also has backing from investors including Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, Joe Lonsdale’s 8VC, and Ari Emanuel’s investment fund, according to the report.

Musk’s lawyer, Marc Toberoff, confirmed he submitted a bid for all the nonprofit’s assets to OpenAI’s board of directors Monday, adding, “It’s time for OpenAI to return to the open-source, safety-focused force for good it once was.”

Altman soon turned down the reported unsolicited $97.4 billion offer. “No thank you but we will buy twitter for $9.74 billion if you want,” He wrote in a post on X, referencing Musk's 2022 purchase of the platform for $44 billion. Musk, not amused, quickly labeled Altman a “swindler.”

Altman cast doubts on Musk’s real intention to acquire OpenAI. The bid aims to “slow down a competitor”, Altman told CNBC on Tuesday. “Elon tries all sorts of things for a long time. This is the latest — you know, this week’s episode,” Altman said in a Bloomberg interview at the Paris AI Action Summit Tuesday. “I think he’s probably just trying to slow us down.”

Altman deemed Musk’s moves including legal challenges as tactics in his competition with OpenAI. “I wish he would just compete by building a better product, but I think there’s been a lot of tactics,” Altman said in the interview. “Many, many lawsuits, all sorts of other crazy stuff, now this. And we’ll try to just put our head down and keep working.”

If Musk’s bid really aims to slow down his xAI’s rival, the situation shows the benefit of the recent loosening of ties between Microsoft and OpenAI, GeekWire co-founder Todd Bishop wrote in an article on Tuesday. The best outcome for Microsoft would be to use this moment to double-down on its own homegrown AI initiatives, while making sure it can still benefit from OpenAI’s technologies but reducing its dependence, Bishop believes.

Microsoft began to invest in OpenAI in 2019 as the ChatGPT developer’s early investor and input a total of $13 billion as of September 30, 2024. OpenAI announced in October that it has raised $6.6 billion in new funding at a $157 billion post-money valuation. Microsoft was said to join in the funding with about $750 million. Nevertheless, Microsoft doesn’t have a seat on the OpenAI nonprofit board, not even as an observer, so it is in a decent position to avoid Musk’s $97.4 billon distraction, Bishop noted.

SoftBank Group Corp. was reported to be close to finalize a $40 billion primary investment in OpenAI at a $260 billion valuation. The funding would lift OpenAI’s post-money valuation to $300 billion, and made SoftBank replace Microsoft as the top backer of OpenAI. More fundraising from other investors like SoftBank will further lower the implications of the Musk bid for Microsoft, according to Bishop. He added that Microsoft still has the right of first refusal for OpenAI’s future cloud requirements while there is long-term risk in other investors’ getting involved.