What’s eating Musk and Altman? Billionaires beef over AI’s future

OpenAI CEO Sam Altman has refused a buyout offer from Tesla founder Elon Musk with a curt “no thank you” on X, marking the latest episode in an ongoing feud between the two tech billionaires.

On Feb. 10, a group of investors led by Musk reportedly submitted a $97.4 billion bid to OpenAI’s board of directors. Altman declined the offer and responded with a tongue-in-cheek proposition of his own:

“No thank you but we will buy twitter for $9.74 billion if you want.”

Musk himself replied with a video of Altman’s 2023 testimony before the US Congress, wherein Altman claimed he had no equity in OpenAI. “Scam Altman,” Musk wrote.

The back-and-forth on social media is just the latest episode in a dispute between the two tech billionaires over the direction of the American AI industry, going back to when Altman and Musk co-founded OpenAI.

Founding OpenAI and “capped profits”

In 2015, 11 co-founders started OpenAI, with Musk and Altman among them, serving as co-chairs. In an introductory blog post, OpenAI outlined its nonprofit and collaborative character, stating its mission was to “advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.”

The organization further said it would “freely collaborate with others across many institutions” in the course of its research.

By February 2018, OpenAI had announced that Musk would step down from its board of directors, although he would continue to “donate and advise the organization.” The board cited Musk’s growing AI interests through Tesla, which was developing the technology for self-driving vehicles. His stepping down was seen as a reasonable agreement that would prevent any potential conflicts of interest. 

The announcement of Musk’s departure was paired with a broadening of OpenAI’s donor group as it sought out more funding — something that would become the catalyst for Musk’s conflict with OpenAI.

Related: OpenAI CEO: Costs to run each level of AI falls 10x every year

Several prominent executives among OpenAI’s founders — including Altman, Musk, trans-humanist tech billionaire Peter Thiel and LinkedIn co-founder Reid Hoffman — pledged $1 billion to the project. However, the firm only raised some $130 million, including a reported less than $45 million from Musk himself, highlighting the need for further funding in order to reach its goals. 

Just one year after Musk’s departure, OpenAI shifted to what it called a “capped-profit” model. This nonprofit/for-profit hybrid created OpenAI LP, which could “raise investment capital and attract employees with startup-like equity.”

The for-profit LP would still ostensibly be under the direction of the nonprofit organization, which would “govern and oversee all […] activities through its board.”

By the end of 2022 and into 2023, claims of racial and cultural biases in AI models had become prevalent, with many finding that AIs could be outright racist. This prompted AI developers to correct their models — a move Musk wasn’t happy about.

Related: xAI engineer quits after post on Grok 3 AI ranking

In 2023, Musk started his own AI firm — dubbed xAI, in his own signature fashion — that would develop an “anti-woke” AI called Grok. Early iterations didn’t work as planned, though he said subsequent versions would get “better” at skewing anti-liberal.

While many observers saw Grok as an expression of Musk’s brand of far-right, libertarian politics, Musk himself claimed that AI must be “maximally truth-seeking” and that politically correct AI is “incredibly dangerous.”

Musk sues Altman and OpenAI, argues about it on X

By 2024, things had come to a head, and Musk decided to take legal action, claiming in a complaint filed in a California district court that Altman and OpenAI “courted and deceived Musk, preying on Musk’s humanitarian concern about the dangers posed by AI.”

He also claimed that OpenAI had become closed-source, essentially becoming a subsidiary of one of its largest investors, Microsoft.

By November 2024, he had expanded the lawsuit to include a preliminary injunction to stop OpenAI from going for-profit, as well as antitrust claims and adding Microsoft as a defendant. The complaint states:

“Never before has a corporation gone from tax-exempt charity to a $157 billion for-profit, market-paralyzing gorgon—and in just eight years.” 

Then things got personal. 

After US President Donald Trump took office in January 2025 and announced the $500 billion Stargate investment deal for AI development, Musk trashed the initiative, raising doubt as to whether the funds had actually been secured. He called Altman a swindler and a liar on X. 

Altman clapped back:

February saw Musk’s aforementioned bid on OpenAI, which Altman roundly rejected. 

Open-source AI and Musk’s business interests

Musk’s lawsuit against OpenAI and the ensuing spat with Altman has raised questions both about the nature of open-source AI and to what degree the Tesla CEO’s concerns are actually related to his own business interests. 

Firstly, Musk isn’t the only one concerned about OpenAI’s “closed” direction. According to The Wall Street Journal, some 20 executives and engineers left the firm just last year due to concerns about the firm becoming a for-profit, including chief technology officer Mira Murati.

Current and former employees have reportedly said OpenAI is rushing product announcements and safety testing. The WSJ also noted that it has added people with corporate and military backgrounds to its board of directors. 

Concerns over the direction of OpenAI and Altman’s alleged personal conduct once led to his temporary ousting in 2023 amid claims of “psychological abuse” along with “lying and being manipulative in different situations.”

However, Altman was quickly reinstated, and the board was reshuffled after an investigation found that his conduct “did not mandate removal.”

Recent: DeepSeek solidified open-source AI as a serious contender — AI founder

Others may share Musk’s stated concerns over the responsibility of this corporate model of AI development, yet Altman has accused him of simply looking out for his own business interests.

“I think he is probably just trying to slow us down. He obviously is a competitor,” Altman said in an interview with Bloomberg. 

In an October filing, OpenAI claimed that the suit is part of Musk’s “increasingly blusterous campaign to harass OpenAI for his own competitive advantage.”

While Musk and Altman bicker on X and in court, the race to develop better AI models continues. And while they fight, open-source models pose a growing threat. Last month, Chinese competitor DeepSeek rocked markets when it debuted a model that was developed open-source on a much smaller budget than OpenAI or Google could manage.

DeepSeek didn’t start from zero — it was developed on top of Meta’s open-source large language model Llama 2 — but “that’s legit, and it is the whole purpose of open source,” AI consultant Merav Ozair told Cointelegraph.

“You have a community that learns from each other, and technology can evolve faster and better,” she said.

“Open source always ‘wins.’”

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