Sam Altman vs. Elon Musk: The Billion-Dollar AI Feud

The world of AI isn’t just about breakthrough models and mind-blowing innovations—it’s also home to some of the biggest rivalries in tech. And right now, nothing is as heated as the feud between Sam Altman and Elon Musk.

What started as a shared vision for OpenAI in 2015 has spiraled into one of the most public and aggressive tech battles of the decade, complete with lawsuits, billion-dollar takeover attempts, and competing AI models. Now, with Musk making a staggering $97.4 billion bid to take over OpenAI and Altman calling it a distraction, the war over the future of artificial intelligence is more intense than ever.

So, how did we get here? What does this fight mean for the AI industry? And who’s really ahead in the race for AI dominance?

The Rise and Fall of an AI Partnership

It wasn’t always like this. Back in 2015, Musk, Altman, and a group of top tech leaders co-founded OpenAI as a nonprofit, focused on ensuring artificial intelligence would benefit humanity rather than a select few corporations. Musk, always vocal about his fears of AI running amok, saw OpenAI as a way to create a responsible alternative to Google’s DeepMind.

But by 2018, cracks in the partnership were obvious. OpenAI was struggling to raise the billions of dollars needed to keep up with Google and Meta. Musk proposed taking over the company and absorbing it into Tesla, but when the idea was rejected, he left the board. In 2019, OpenAI made a controversial pivot—it became a for-profit company and partnered with Microsoft, a move Musk saw as a betrayal of the organization’s founding principles.

The $97.4 Billion Takeover That Shook OpenAI

Fast forward to February 2025, and Musk has gone from OpenAI’s co-founder to its biggest critic. He’s sued OpenAI, claiming it has abandoned its original mission, and he’s thrown shade at Altman every chance he gets. But his latest move is the most aggressive yet—a $97.4 billion takeover bid to regain control of OpenAI and put it back on what he sees as the “right path.”

Altman, however, isn’t buying it—literally. In a letter to OpenAI staff, he dismissed Musk’s bid as a publicity stunt, claiming that the move was meant to “distract and destabilize” the company rather than actually improve it. He even joked that for the same price, Musk could just buy Twitter all over again.

With OpenAI riding high after launching GPT-5 and expanding its enterprise offerings, Altman’s message was clear: We don’t need Elon Musk’s money, and we’re not selling.

Musk’s Counterattack: xAI and Grok-3

But Musk isn’t just fighting OpenAI in the courtroom and boardroom—he’s taking the battle to the product level too. His AI startup, xAI, has been working hard to create an alternative to OpenAI’s ChatGPT, and in February 2025, it launched Grok-3, a chatbot that Musk claims outperforms OpenAI’s models in multiple key benchmarks.

According to xAI, Grok-3 is built on a proprietary dataset that doesn’t rely on the closed-source systems that power OpenAI’s GPT models. Musk has argued that this makes Grok-3 more open and accessible—though critics say it’s just another attempt to differentiate his AI platform from the competition.

This launch comes at a time when AI competition is fiercer than ever. OpenAI has the lead, but Meta, Google DeepMind, and startups like Anthropic are all gunning for the top spot. Musk’s aggressive push with xAI suggests he’s betting big on AI not just as a business, but as the defining tech of the decade.

At this point, it’s clear that the Altman-Musk feud isn’t just personal—it’s about who controls the future of AI. With OpenAI rejecting Musk’s takeover bid and xAI ramping up its competition, the battle lines have been drawn.

• Will Musk escalate his legal fight against OpenAI? He’s already sued the company for allegedly violating its founding mission, and he might not be done yet.
• Can xAI’s Grok-3 gain traction? Musk claims it’s better than OpenAI’s models, but businesses and developers will ultimately decide if they want to switch.
• What role will regulators play? As AI becomes more powerful, governments may step in to limit corporate control—which could impact both OpenAI and xAI.

One thing’s for sure: this feud is far from over. With billions of dollars and the future of artificial intelligence on the line, the rivalry between Sam Altman and Elon Musk is just heating up.

At its core, this isn’t just a battle between two tech titans—it’s a fight over who should control AI and how it should be developed. Altman sees OpenAI’s commercialization as necessary to fund innovation, while Musk believes it’s a dangerous step towards corporate AI dominance.

Who’s right? That’s a question that may not have an answer yet. But as AI reshapes industries, economies, and daily life, the choices made by OpenAI, xAI, and their leaders will impact us all.

One thing’s certain: this is the AI showdown of the decade. And everyone in tech is watching.

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If you are a builder, investor or researcher in the space and would like to have a chat – please reach out to me at amit@thelotuscapital.com