A consortium of investors led by Elon Musk is offering to buy the nonprofit that controls privately held artificial intelligence (AI) start-up OpenAI for $97.4 billion U.S.
Musk’s attorney, Marc Toberoff, is quoted in The Wall Street Journal saying he submitted the bid to OpenAI’s board of directors on Feb. 10.
The unsolicited offer complicates OpenAI CEO Sam Altman’s efforts to convert the start-up company into a for-profit business model and spend up to $500 billion U.S. on AI infrastructure.
At the same time, Altman and Musk are battling in the courts over the future of OpenAI.
The bid is being backed by Musk’s own artificial intelligence company xAI, and there is speculation that it could merge with OpenAI if a deal is finalized.
Musk’s bid is backed by several venture capital firms, including Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, and 8VC.
Altman and Musk have a long and contentious history. The two men co-founded OpenAI back in 2015 as a charity.
In 2019, after Musk left the company and Altman became CEO, OpenAI created a for-profit subsidiary that has served as a vehicle for it to raise money from investors such as Microsoft (MSFT).
Altman is now in the process of turning that subsidiary into a traditional company and spinning out the non-profit, which would own equity in the new for-profit unit.
OpenAI has said it plans to complete the for-profit transition by late 2026. In a funding round last October, OpenAI was valued at $157 billion U.S.
In recent months, Musk has filed a series of lawsuits accusing OpenAI of betraying its non-profit mission and colluding with its largest investor, Microsoft, to dominate the development of AI.
OpenAI has called Musk’s legal claims baseless.
Neither OpenAI nor xAI are publicly traded. They are both privately held companies.
