The news: Elon Musk tried to enlist Meta CEO Mark Zuckerberg in a $97.4 billion takeover of OpenAI in February, per court filings in OpenAI’s ongoing countersuit against Musk.

The failed bid was Musk’s response to OpenAI’s potential shift to a for-profit model, which he claims broke its founding mission. Meta declined to participate, but OpenAI is now subpoenaing the company for communications between Musk and Zuckerberg, per CNBC.

In March 2024, Musk filed his lawsuit against OpenAI CEO Sam Altman, accusing the latter of jeopardizing OpenAI’s nonprofit mission, and in December, Meta took its own action by pressuring California’s attorney general to block OpenAI’s transition to a for-profit company.

OpenAI under siege: The optics of two Big Tech giants cooperating to neutralize a common rival—especially one considered the market leader in AI—could trigger antitrust concerns around market concentration, AI safety, and platform power. 

Here’s why a takeover wouldn’t have worked:

• Regulators would likely see any joint bid from two of the world’s most powerful tech CEOs conspiring to buy and dismantle a market leader as an anticompetitive precedent.
• Microsoft and Softbank, OpenAI’s primary backers, would likely block or litigate any attempts at a hostile takeover, citing contracts and intellectual property access.

The takeover attempt underscores a deeper reality: Big Tech rivals see OpenAI as an existential threat.

• Musk’s attempt to partner with Meta reveals not just desperation but a recognition: Neither xAI nor Meta alone can match OpenAI’s momentum.
• It also shows that while Musk demonstrated his intent to buy OpenAI, he didn’t have the necessary funding, requiring another party like Meta to cover acquisition costs.

Meta opted out of a takeover bid, but it continues to wage its own war with OpenAI by poaching high-profile AI talent, a strategy that seems to be backfiring. 

Our take: The initial phase of the AI boom, defined by research breakthroughs and experimentation, is giving way to a more aggressive era of market consolidation, legal entanglements, and power politics. 

Litigation is emerging as the last resort when innovation stalls or acquisition paths close—an indicator that the AI industry could be entering a defensive phase where court battles stand in for competitive breakthroughs.

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.