Backing Tesla’s patron in the investment are Musk’s artificial intelligence company, AI, with Baron Capital Group, Valor, Atreides, VY Capital, Joe Lonsdale’s 8VC, and an investment vehicle led by Endeavor ceo Ari Emanuel
Elon Musk and a group of co-investors, including his artificial intelligence statup xAI, Baron Capital Group, Valor, Atreides, VY Capital, Joe Lonsdale’s 8VC, and an investment vehicle led by Endeavor CEO Ari Emanuel, have put up $97.4 billion to buy OpenAI, the artificial intelligence giant that developed ChatGPT.
The news-bomb was launched late last night Italian time by the Wall Street Journal, while the response of OpenAI founder SamAltman came in the past few hours on X: “No thanks, but we’ll buy Twitter for $9.74 billion if you want,” a laughable figure compared to the $44 billion shelled out in 2022 by Musk to buy the social network (see the press release at the time here).
On the other hand, OpenAi is famously raising just these weeks its umpteenth investment round at stellar valuations, a far cry from the just under $100 billion offered by Musk and his co-investors. Indeed, recall that last week news broke that the new round that OpenAI is raising is $40 billion total, $25 billion of which would be invested by Japanese banking giant Softbank. All based on a monstrous valuation of $340 billion (see here a previous article by BeBeez). A deal that follows the round that closed in October 2024, in which the scaleup raised $6.6 billion, bringing it to a posticle t-money valuation of $157 billion. Leading the round were Thrive Capital and Khosla Ventures, in addition to Microsoft, the scaleup’s largest backer to date, and chipmaker Nvidia as a new investor. Altimeter Capital, Fidelity, SoftBank and Abu Dhabi’s sovereign investment vehicle , dedicated to AI, MGX, also participated in the round (see here a previous article by BeBeez).
Returning to Musk’s bid, this concerns the nonprofit company that controls OpenAI. In a note sent to CNBC, Musk’s lawyer, Marc Toberoff, said, “It is time for OpenAI to return to being the open-source, security-oriented force it once was” and that the offer is “for the purchase of all of the assets of OpenAI, Inc.” with funds to be “used exclusively to further the original charitable mission of OpenAI, Inc.”
The fact that Altman has sent the offer back to the sender does not mean that it ends there, precisely because the board of the nonprofit will decide. Musk, who is one of President Donald Trump’s top advisers, had co-founded OpenAI with Altman in 2015, when precisely the nonprofit entity focused on artificial intelligence research was formed.
Since then OpenAi has raised tens of billions of dollars from investors and earlier this year was involved by President Trump along with Softbank and Oracle in the $500 billion Stargate Project to build huge data centers in the U.S. to serve the development of artificial intelligence in the country (see here a previous article by BeBeez).
For its part, xAI last year raised capital in two rounds, both $6 billion: a Series B in May, led by Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal, and Kingdom Holding; and another Series C in November, led by A16Z, Blackrock, Fidelity Management & Research Company, Kingdom Holdings, Lightspeed, MGX, Morgan Stanley, OIA, QIA, Sequoia Capital, Valor Equity Partners, and VY Capital (see here a previous article by BeBeez).
