OpenAI in Play: Musk’s Surprise Bid for His Former Creation
Elon Musk – CEO of Tesla and SpaceX- makes a surprise bid to acquire OpenAI, the AI company he co-founded in 2015 as a non-profit company. This move, as seen by many could reshape the future of artificial intelligence.
OpenAI is the company behind ChatGPT – arguably the most popular and advanced AI currently.
Musk made an unsolicited bid to buy OpenAI for $97.4 billion to buy OpenAI through his attorney – Marc Toberoff.
Toberoff had said “It is time for OpenAI to return to the Open-source, safety-focused for good it once was” while submitting the bid. “We will make sure that happens” Musk had said in his statement.
It will be recalled that Elon Musk has his own AI start-up company xAI which has made a significant effort in recent times to be at the forefront of the AI tech race.
Ironically, xAI is also listed as part of the funding partners for the deal. Others include Valor Equity Partners, Baron Capital Group, Valor Management, Atreides Management, Vy Fund, and firms run by Musk allies Ari Emanuel and Jon Lonsdale.
The Veil Behind the Bid to Buy OpenAI
Elon’s bid to buy OpenAI at $97.4B is a hostile bid because the current market valuation at the last funding round was $156B. More likely, it is a move to stop Sam Alman (CEO of OpenAI) from taking over the non-profit entity of OpenAI.
The current structure of OpenAI is such that it is made up of two parts – the Non-profit entity and the for-profit entity. The For-Profit Entity is under the Non-Profit portion of the company.
Elon Musk provided the first seed funding for the non-profit entity, and Nvidia donated some of the initial hardware for the take-off of the company.
In recent months, OpenAI, under the leadership of Sam Altman has been making several attempts to transition the company to a fully For-Profit company.
Sam is reportedly trying to buy off the Non-profit entity for a meager $40 Billion, to give him full control of the company. With Elon making a bid of $97.4 B for the company, it will make Sam’s plan difficult, because it just raised the value of the Non-profit portion.
He (Sam) will have a hard time explaining why he will be $40 Billion for the Non-Profit section. Elon has in the past accused him of being a swindler.
At the moment, Sam Altman has openly rejected the bid. In a post he made on X, he instead offered to buy Twitter for $9.74 Billion, a far cry from what Elon spent in buying Twitter.
“No thank you but we will buy Twitter for 9.74 billion if you want”
Sam’s response is to send a message to Elon that his bid is a mockery of OpenAI’s valuation and is a way of trolling Elon. We await Elon’s response, he is not quick to back out of a fight without causing some damage.
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Photo credit: Nathan Laine / Bloomberg / Getty Images
