Mr. Musk said the deal was aimed at returning OpenAI to an open-source platform and benefiting humanity.
In the most dramatic and unexpected turn of events in Silicon Valley’s AI wars, billionaire Elon Musk has announced that he is leading a powerful consortium to buy OpenAI for $97.4 billion, according to The Wall Street Journal. The offer was sent to OpenAI’s board of directors on Monday morning.
The Musk-led consortium includes his own AI firm xAI, along with big names in venture capital like Valor Equity Partners, Hollywood mogul Ari Emanuel, and Palantir co-founder Joe Lonsdale’s firm 8VC.
The move comes at a pivotal time for OpenAI. CEO Sam Altman is currently in the midst of a series of major deals: transitioning the company to a for-profit model, raising $40 billion at a $340 billion valuation, and launching a $500 billion AI infrastructure project. For Musk, who co-founded OpenAI with Altman in 2015 before leaving in 2019, the offer represents his boldest move yet to challenge what he sees as the company’s betrayal of its original mission of developing AI safely and openly (something he is currently suing OpenAI for).
“It is time for OpenAI to return to being the open-source, safety-focused platform it once was,” Musk said in a statement provided to The Wall Street Journal by his lawyer Marc Toberoff. “We will make sure that happens.”
The offer also complicates OpenAI’s plans to transition to a for-profit model, as Musk’s team has promised to match or exceed any higher offer. This creates a difficult situation for Altman, who is now navigating negotiations with Microsoft and other stakeholders over equity in the planned for-profit structure.
Shortly after the news broke, Mr Altman posted on X (formerly Twitter): “No thanks, but we’ll buy Twitter for $9.74 billion if you want.” Mr Musk later responded to the tweet with a one-word response: “Scam.”
OpenAI declined to comment on the offer. The company has not yet received a formal offer, according to a person familiar with the matter, but Altman did respond to X.
Mr Musk was a co-founder and early investor of OpenAI, but left after a power struggle. Mr Musk has also created his own AI company to compete directly with Altman’s.
The unsolicited offer comes as OpenAI prepares to close a $40 billion funding deal that would nearly double the company’s valuation in just four months. The new round, led by Japanese conglomerate SoftBank, values OpenAI at $300 billion, according to three people familiar with the deal. The deal would make OpenAI one of the most valuable private companies in the world, alongside rocket company SpaceX and TikTok maker ByteDance.
SoftBank will invest as much as $40 billion in OpenAI, with other investors providing about a quarter of the total, the people said. (The New York Times has sued OpenAI and its partner, Microsoft, for alleged copyright infringement of news content related to the AI system. The two companies have denied the lawsuit’s allegations.)
