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OpenAI’s boss Sam Altman rejected an unsolicited $97.4 billion bid from an Elon Musk-led consortium to buy the ChatGPT maker’s nonprofit owner.
Musk, who helped to co-found OpenAI with Altman in 2015, has argued that Altman’s efforts to restructure the company into a for-profit enterprise betray its founding mission of developing artificial intelligence for the benefit of humanity.
Musk said in a statement it was time for OpenAI to become an “open-source, safety-focused force for good” again, although his own AI company xAI is run for profit.
SIGNALS
Musk’s showdown with OpenAI escalates
Musk has filed multiple legal challenges against OpenAI since it released ChatGPT in 2022, including asking a federal court in November to block the startup’s planned restructuring. The tech billionaire’s desire to assert control over startup, which he helped to found, is “textbook founder’s syndrome,” a columnist argued in Reuters, adding that Musk’s co-founder Altman is similarly unlikely to back down: “A contest over OpenAI is one over the avatar of the market mania that cemented both men’s positions,” he wrote. Musk — who runs his own AI startup xAI — is not the only OpenAI competitor challenging the company’s desired transition: In December, Meta sent a letter to California’s attorney general contesting the move.
Musk’s gambit could complicate for-profit conversion
The bid complicates OpenAI CEO Sam Altman’s efforts to dislocate the startup from the nonprofit that currently controls OpenAI, The New York Times reported. Musk’s offer attempts to establish the charity’s value — a recently funding round reportedly valued OpenAI at about $300 billion as it is now. If the new, for-profit OpenAI buys the spun-off charity for far less than outside bids, then Altman would likely find himself under more regulatory scrutiny (several state charity regulators are already probing the change), a legal expert told the outlet. OpenAI is already being challenged by the expectations of its major stakeholders, including Microsoft, which anticipate equity in the new OpenAI: “If Musk’s gambit increases the equity awarded to the nonprofit, it will be even more difficult,” The Wall Street Journal noted.
Debate over OpenAI will shape AI’s future
The debate over OpenAI’s transition reflects a broader ideological split over how artificial intelligence should be developed, used, and regulated. Leading figures like Geoffrey Hinton, known as the “Godfather of AI,” have repeatedly warned of AI’s risks; Hinton criticized OpenAI’s move to become for-profit as in conflict with the imperative to minimize AI’s dangers. Even if a for-profit OpenAI retained AI safety-conscious board members, protecting shareholder interests would be paramount, a business expert at Tufts University wrote in The Conversation. Some analysts disagree, arguing that OpenAI needs to commercialize in order to keep innovating: “OpenAI has to act ‘traditional’ if they want to tap into billions of enterprise spending over the next decade,” one analyst told CIO.