The Unseen Reasons Behind Tesla’s Failed Bid for OpenAI
Reuters
OpenAI’s board of directors has officially rejected Elon Musk’s nearly $100 billion offer for the maker of what is considered the world’s best-known artificial intelligence (AI) tool, ChatGPT. Despite this rejection, some experts suggest that Musks unsolicited bid might not be entirely unsuccessful in his broader plans.
Musk appears to be attempting to hinder OpenAI’s growth trajectory as CEO Sam Altman aims to transform the company from a non-profit entity into a for-profit one. University of Cambridge associate teaching professor Johnnie Penn told the BBC, “Musk is basically trying to stymie OpenAI’s growth trajectory.”
Profit vs. Non-Profit
Last week, Musk and a group of investors including Hollywood superagent Ari Emanuel offered $97.4 billion for all of OpenAIs assets. While this was an enormous sum, it fell short of the $157 billion valuation from just four months prior and was significantly lower than some estimates placing its value at around $300 billion.
The complexity surrounding Musk’s bid arises from OpenAIs unique structure that blends non-profit and for-profit elements. Altman seeks to alter this setup by removing the non-profit board, a move he acknowledges will incur costs which Musk seems aimed at inflating with his offer. According to Cornell University senior lecturer Lutz Finger, who is also the founder of AI startup R2Decide, “By Musk putting a price tag on the non-profit part, he makes the split way more expensive for Altman to do.”
AI Explained and Musk’s Motives
Musk justified his actions by claiming that he wants OpenAIco-founded by himto return to its original non-profit mission of developing AI for humanitys benefit. Others believe, however, that his motives are more self-serving and linked to his own AI ventures like xAI and chatbot Grok, which have received lackluster public reception.
“Musk has missed the AI train somewhat,” said Finger. He believes Musk is now trying to undermine OpenAI as a major competitor in the field. An already tense relationship between Altman and Musk worsened after Altman taunted Musks offer on X, followed by Musk labeling him a “swindler.” In an interview with Bloomberg, Altman retorted that Musk isnt a happy person and makes decisions from insecurity.
Legal Battle and Impact
The dispute is also playing out in court. US district judge Yvonne Gonzalez Rogers is considering a request for an injunction by Musk to block OpenAI’s planned conversion, arguing he will suffer irreparable harm without her intervention. During a hearing earlier this month in Oakland, California, she noted it was plausible that Musks claims could be true and added that “He’ll sit on the stand.”
OpenAIs lawyers counter argue that Musk’s recent bid contradicts his previous assertions about OpenAI assets not being transferable for private gain. While out of court these constraints do not apply, they add: “[O]ut of court, those constraints evidently do not apply, so long as Musk and his allies are the buyers.” Some observers suggest making a deal never was his goal.
I think he’s just trying to create noise and news and consternation, said Karl Freund from Cambrian-AI. However, this strategy could have adverse effects on Musks reputation. “He’s brilliant. He creates incredible companies that are doing incredible things,” noted Freund. “But his personal agenda is causing people to question his motives.”
