An investor consortium backed by Elon Musk today made an unsolicited $97.4 billion bid to acquire OpenAI.

The offer is for the ChatGPT developer’s nonprofit parent organization, the Wall Street Journal reported. The consortium includes Valor Equity Partners, Baron Capital, Atreides Management, Vy Capital, 8VC and a fund affiliated with Ari Emanuel, chief executive of talent agency Endeavor Group Holdings Inc. Musk-backed OpenAI competitor xAI Corp. is reportedly participating as well.

“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk said in a statement to the Journal. “We will make sure that happens.”

In a post on X, OpenAI CEO Sam Altman respondedd, “no thank you but we will buy twitter for $9.74 billion if you want.” He later said more clearly that OpenAI is “not for sale.”

OpenAI launched in 2015 as a nonprofit artificial intelligence research lab. Four years later, it formed a for-profit arm that now leads its product development efforts. Musk, who provided some of the nonprofit’s initial funding in 2015, sued OpenAI last August over the creation of the for-profit arm.

Four months after the lawsuit, Musk raised $6 billion for xAI, which competes with OpenAI in the large language model market. It offers a large language model family called Grok that is available through a chatbot and an application programming interface. The newest model in the series, Grok 3, is expected to debut later this month.

The Journal reported today that OpenAI could merge with xAI if the Musk-led consortium’s acquisition offer is accepted. Such a transaction may be complicated to carry out in practice given that xAI is a for-profit company, while OpenAI is a nonprofit. In November, Musk asked a judge to block OpenAI’s bid to become a for-profit company.

Last month, Musk asked the attorneys general of California and Delaware to auction off a stake in OpenAI. If such an auction takes place, it could create competition for the Musk-led consortium that hopes to buy the AI provider. An auction could draw rival bids that may require the investor group to raise its offer.

The new funding round that OpenAI is working to raise may also complicate the takeover bid. Last month, the Journal reported that the ChatGPT developer is seeking a $40 billion investment at a valuation of $340 billion. That’s more than three times what the Musk-led consortium is offering.

As part of its most recent $6.6 billion funding round, OpenAI agreed to restructure into a for-profit company. It plans to reincorporate as a public benefit corporation and give a significant number of shares to the nonprofit that currently oversees its work. OpenAI expects to complete the process next year. 

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