Tech industry maverick Elon Musk on Monday reportedly launched an unsolicited takeover bid for artificial intelligence leader OpenAI, whose biggest investor to date has been Microsoft. Musk's move came as privately held OpenAI appeared close to getting more funding from Japan's SoftBank. Microsoft stock wavered amid the developments.
A consortium of investors led by Elon Musk is offering $97.4 billion to buy the nonprofit that controls OpenAI, according to a Wall Street Journal report. OpenAI's board of directors, which has been in flux, would mull the offer.
OpenAI last week was finalizing a deal with SoftBank, according to reports. SoftBank would invest $40 billion in OpenAI at a $260 billion valuation.
Tesla founder Musk, an advisor to President Donald Trump, has had a long-running legal dispute with OpenAI. Musk has filed a federal lawsuit aiming to block OpenAI's conversion to a for-profit company. Musk left the OpenAI board in 2018.
OpenAI Chief Executive Sam Altman told CNBC that Musk aims to "slow down a competitor" with the $97.4 billion offer.
Meanwhile, Microsoft has been the biggest investor in OpenAI. Microsoft has provided over $13 billion in funding to OpenAI. But SoftBank could be OpenAI's new sugar daddy in a new funding round.
Microsoft Stock: OpenAI Relationship
Meanwhile, Microsoft recently has moved away from being the exclusive provider of cloud computing infrastructure to OpenAI, which has turned to Oracle, Coreweave and others.
OpenAI recently raised $6.6 billion in new funding, valuing the startup at $157 billion. New investors included SoftBank and Nvidia.
Also, OpenAI said it plans to create a Delaware public benefit corporation to oversee commercial operations.
OpenAI, Anthropic and other startups are scrambling for cash infusions from well-capitalized tech industry giants in order to continue operating.
OpenAI released generative AI-based ChatGPT in late 2022 and has been adding new AI models to its family.
On the stock market today, Microsoft stock wavered in early trading. Microsoft closed up 0.6% to 412.22 in Monday's regular session.
Further, Musk on Monday said he is not interested in buying China-based, social media platform TikTok.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
