Elon Musk-Backed Consortium Submits $97.4 Billion Bid for OpenAI, According to Multiple Sources

In a surprising move, a consortium of investors led by Elon Musk announced plans for a hostile takeover of OpenAI, with a bid of nearly $97.4 billion to purchase all of OpenAI’s assets. The investor group, which includes prominent figures closely linked to Musk, expressed their willingness to consider and potentially exceed higher bids.

The OpenAI CEO, Sam Altman, has responded to the offer, stating, “No thank you, but we will buy Twitter for $9.74 billion if you want.” This bold move has left many speculating about the intentions behind the bid and the potential seriousness of the consortium’s intentions.

The consortium includes the following parties: Baron Capital Group Inc., Valor Management LLC, Atreides Management, LP, Vy Fund III L.P., Emmanuel Capital Management LLC, and Eight Partners VC LLC. While some members of the group have a thinner public profile, those involved are closely linked to Musk and have invested in his companies or have prior associations with him.

Baron Capital Group, founded by Ron Baron, manages multiple mutual funds and has significant stakes in Tesla and SpaceX, through the Baron Partners Fund. Atreides Management, affiliated with Boston-based hedge fund Atreides, has also invested in Tesla and its founder, Gavin Baker, was a key figure in SpaceX’s early stages and a public supporter of Musk’s compensation package.

Valor Management, founded by early SpaceX investor Antonio Gracias, another former Tesla board member, and a previous investor in Musk’s SolarCity before Tesla acquired it, demonstrates the close ties of the consortium to Musk. Vy Capital, founded by Alexander Tamas, has a significant SpaceX stake and has invested in other Musk-companies such as The Boring Company and Neuralink.

Eight Partners VC, popularly known as Joe Lonsdale’s firm, 8VC, has an established track record of supporting innovative ventures, closely aligning with Musk’s interests. Lonsdale himself has publicly professed his admiration for Musk, arranging an appearance on CNBC, which Musk later re-posted on X.

Given these close relationships and investments, there is much speculation about the intentions behind this bid. Some experts argue that this is merely a pretension for Musk to possibly drive up the cost OpenAI would need to pay to hold onto its original non-profit status while restructuring.

Musk’s involvement with OpenAI stemming from the founding of the company as a non-profit AI research organization and his efforts to block Altman’s plans for a profit-driven transition serve as a reminder of his vested interest in the situation.