Elon Musk-Led Consortium Offers $97.4 Billion for OpenAI [Report]

A consortium led by Elon Musk has submitted an unsolicited offer of $97.4 billion to acquire the nonprofit arm that governs OpenAI, according to a new report from the WSJ. The move intensifies Musk's ongoing dispute with CEO Sam Altman over the organization's future.

OpenAI was established in 2015 as a nonprofit initiative by Musk and Altman. In 2019, after Musk's departure and Altman's rise to leadership, OpenAI created a for-profit subsidiary to attract major investments, including support from Microsoft. Currently, Altman is orchestrating a transformation: the for-profit arm is being molded into a traditional corporation, while the original nonprofit is set to be spun out as an equity holder in the new company. A central challenge in this restructuring is determining the proper valuation of the nonprofit—a question that Musk's staggering bid puts the spotlight on.

Marc Toberoff, Musk's attorney, formally presented the bid to OpenAI's board earlier this week. In his statement, Musk stressed the need to return to OpenAI's original mission, emphasizing that it should once again become "an open-source, safety-focused force for good." The offer implies not only a high valuation for the nonprofit but also the potential for Musk—or his chosen partners—to secure significant influence over the future direction of the company.


Notably, the proposal comes amid a backdrop of legal and strategic maneuvering. Musk has mounted several legal challenges, accusing OpenAI of straying from its nonprofit roots by establishing a for-profit subsidiary and, allegedly, collaborating with Microsoft to dominate the AI sector. On January 7, Toberoff sent letters to the attorneys general in both California (the company's base) and Delaware (its place of incorporation), urging a bidding process to ensure the nonprofit's assets are valued fairly. Musk and his backers argue that without such a process, the nonprofit may be sold for less than its true worth.

In response, OpenAI has dismissed these claims, insisting that the nonprofit will receive full and fair compensation for its stake in the evolving corporate structure. Internal documents released in December reveal that Musk once supported the nonprofit-to-for-profit conversion—until he found that he could not secure the level of control he desired.

The bid is supported by Musk's own artificial intelligence venture, xAI, and is backed by several high-profile investors, including Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, and 8VC (led by Palantir co-founder Joe Lonsdale). Hollywood executive Ari Emanuel is also among those supporting the proposal. Toberoff has made it clear that his consortium is ready to outbid any competitors should they emerge.

This dispute unfolds just as Altman is promoting an ambitious new initiative known as Stargate—a project aimed at investing up to $500 billion over the next four years in U.S. data centers to bolster the nation's AI infrastructure. Altman recently showcased this plan during a high-profile event at the White House, alongside former President Trump. Musk, who was notably absent from the announcement, has been vocally critical of the financial backing for Stargate, questioning the availability of funds and even labeling Altman a "swindler"—claims that Altman has firmly denied.


In addition to the internal restructuring, OpenAI has been navigating complex negotiations with stakeholders like Microsoft regarding equity stakes. A recent funding round in October raised $6.6 billion and valued the company at $157 billion, while talks continue for an additional round that could push its valuation as high as $300 billion, with Japanese conglomerate SoftBank poised to play a major role.

Corporate and legal battles surrounding OpenAI could have significant implications for products and services on Apple devices. For example, with the release of iOS 18.2, Apple integrated OpenAI's ChatGPT assistant into Siri and its writing tools. As OpenAI's structure and strategy evolve, these changes may influence future integrations of AI tools into apps, operating systems, and cloud services that benefit Apple users. While it is possible that Apple could support additional partners in the future, there is currently no indication that the company is working with other large language model providers.

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