Musk-led group makes $97.4 billion bid for control of OpenAI

By Arsheeya Bajwa

(Reuters) -A consortium led by Elon Musk said on Monday it has offered $97.4 billion to buy the nonprofit that controls OpenAI, months after the billionaire sued the artificial intelligence startup to block it from transitioning to a for-profit firm.

Musk's bid could ratchet up longstanding tensions with OpenAI CEO Sam Altman over the future of the startup at the heart of a boom in generative AI technology.

Altman promptly posted on X: "no thank you but we will buy twitter for $9.74 billion if you want."

The two are already embroiled in an ongoing lawsuit. Musk criticized a $500 billion OpenAI-led project called Stargate announced with great fanfare at the White House just after President Donald Trump returned to office, suggesting the investors involved lacked the funding for the project.

"It's time for OpenAI to return to the open-source, safety-focused force for good it once was," Musk said in the press release. "We will make sure that happens."

OpenAI, Musk, Musk's attorney Marc Toberoff and OpenAI backer Microsoft did not immediately respond to Reuters' requests for comment.

The bid is being backed by Musk's AI company xAI, which could merge with OpenAI following a deal, according to the Wall Street Journal which first reported Musk's offer earlier on Monday.

Even without any antitrust implications, a deal this size would need Musk and his consortium to raise enormous funds.

OpenAI was valued at $157 billion in its latest funding round in October, cementing its status as one of the most valuable private companies in the world. SoftBank Group is in talks to lead a funding round of up to $40 billion in OpenAI at a valuation of $300 billion, including the new funds, Reuters reported in January.

Musk cofounded OpenAI with Altman in 2015, but left before the company took off. He founded the competing AI startup xAI in 2023.

OpenAI is now trying to transition into a for-profit from a nonprofit entity, which it says is required to secure the capital needed for developing the best artificial intelligence models.

Musk's lawsuit against OpenAI and Altman says the founders originally approached him to fund a nonprofit focused on developing AI to benefit humanity, but that it was now focused on making money.

(Reporting by Arsheeya Bajwa in BengaluruWriting by Sayantani GhoshEditing by Anil D'Silva, David Gaffen and Matthew Lewis)