Elon Musk’s $97 billion OpenAI bid could give the DOGE chief even more power in the AI race

A group of investors led by Elon Musk has given OpenAI an unsolicited offer of $97.4 billion to buy the nonprofit part of OpenAI. An attorney for the group submitted the bid to OpenAI Monday, the Wall Street Journal reports.

Per the Journal, the other investors in the group include Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, and 8VC, a venture firm led by Palantir cofounder Joe Lonsdale. Ari Emanuel, CEO of sports and entertainment company Endeavor, is also backing the offer through his investment fund.

OpenAI uses a hybrid business structure that consists of a nonprofit parent entity (OpenAI, Inc.) and a for-profit subsidiary (OpenAI LP, referred to as a “capped-profit” company). In part because of the extraordinary high costs of inventing and training AI models, OpenAI created a for-profit subsidiary in 2019 that has let it raise billions from Microsoft and others. Altman is now in the process of turning the subsidiary into a traditional company and spinning out the nonprofit. The nonprofit would, however, own equity in the new for-profit.

The situation may seem familiar to OpenAI board member Bret Taylor, who was chairman of Twitter’s board of directors when Musk bid for, then bought, the company in October 2022. Taylor left Twitter soon after, along with most of the board.

The unsolicited bid ratchets up Musk’s ongoing battle with OpenAI and its CEO Sam Altman. Musk, who was one of the OpenAI cofounders with Altman and others in 2015 (and now leads the Department of Government Efficiency), has already filed two lawsuits against OpenAI complaining that the company has deviated from its original nonprofit mission and is now prioritizing profit-over-public benefit. In the second lawsuit, filed in November 2024, OpenAI’s backer Microsoft was named as a defendant.

In fact, the attorney representing the Musk group makes the new buyout offer sound like just another expression of the complaints in the lawsuits.

“If Sam Altman and the present OpenAI, Inc. Board of Directors are intent on becoming a fully for-profit corporation, it is vital that the charity be fairly compensated for what its leadership is taking away from it: control over the most transformative technology of our time,” said Marc Toberoff, the attorney representing the investors, in a statement Monday.

“As the cofounder of OpenAI and the most innovative and successful tech industry leader in history, Musk is the person best positioned to protect and grow OpenAI’s technology,” Toberoff continued.

Sam Altman responded to the offer on Musk’s X platform, saying he’s not interested but would be open to paying $9.74 billion to acquire X. (OpenAI didn’t respond to Fast Company’s request for comment.)

Musk and the other investors could conceivably end up owning a large share of the for-profit AI. Musk’s AI company, xAI, has said that it’s building large language models (LLMs) that are less constrained by political correctness and more focused on objective truth. OpenAI, meanwhile, has been focused on developing frontier models that achieve artificial general intelligence (AGI), or AI systems that can do most “economically valuable” tasks better than humans.

OpenAI’s for-profit arm is growing quickly. Altman is currently in discussions with the Japanese investment bank, SoftBank Group, which may invest up to $40 billion in the AI company, upping its value to about $300 billion.

Update: This article has been updated to include Marc Toberoff’s statement.