Elon Musk and a group of investors have offered around $155 billion ($US97.4 billion) to buy the nonprofit arm of ChatGPT creator OpenAI, which Musk sued earlier this year to prevent it from becoming a for-profit entity.

Musk’s attorney Marc Toberoff told The Wall Street Journal the unsolicited offer was submitted to OpenAI’s board of directors on Monday.

The move escalates Musk’s push against OpenAI CEO Sam Altman’s plans to transition the firm to a for-profit company, after its innovations helped spur a generative artificial intelligence boom in recent years.

Musk and Altman co-founded OpenAI as a charity in 2015, but Musk left the company in 2019 and founded competing AI startup xAI in 2023.

The billionaire, who owns social media platform X (formerly Twitter) and is CEO of Tesla and SpaceX, sued OpenAI in March 2024, alleging it had abandoned its original mission in “pursuit of profit”.

“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk said in a statement provided to US media.

“We will make sure that happens.”

Musk’s bid is reportedly backed by his company xAI and several venture capital firms.

Altman says ‘no thank you’

Soon after news of Musk’s bid for OpenAI became public on Tuesday, Altman took to X.

“No thank you but we will buy twitter for $9.74 billion if you want,” he quipped, moving Musk's decimal point to the left to suggest X had lost value, and referring to the platform by its old name.

In his own X post less than an hour later, Musk called Altman “Scam Altman”.

OpenAI’s for-profit arm has allowed the company to raise billions of dollars from the likes of Microsoft and other investors.

The firm was valued at approximately $250 billion ($US157 billion) in its latest funding round in October.

However, Altman hopes to spin out the non-profit controlling arm and turn OpenAI into a for-profit company, in order to raise more money to continue developing AI models.

A spun-out non-profit would still have equity in a for-profit OpenAI, which would mean whoever owned the non-profit would have some control over the for-profit.

Toberoff told The Wall Street Journal that Musk’s investor group was prepared to match or beat any competing bids for OpenAI’s non-profit arm.

“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,” he reportedly said.

OpenAI working on Stargate, custom chips

OpenAI is raising billions of dollars as part of a project called Stargate, announced alongside US President Donald Trump in January, which is expected to invest up to $800 billion ($US500 billion) in US data centres in the next four years.

The company is also reportedly finalising a design for its first in-house AI chip, as it seeks to reduce its reliance on silicon from market leader Nvidia.

OpenAI's training-focused chip is allegedly seen as a possible leveraging tool in the company’s negotiations with other chip makers, Reuters reports.

The firm also reportedly plans to keep developing more advanced processors in the future.

OpenAI has also been working on a consumer device with former Apple designer Jony Ive, who helped design early iPhones and other Apple products.