The Musk Vs. Altman Battle Intensifies

The Kendrick-Drake beef for people whose favorite book is Sapiens just got juicier. Sam Altman is now warding off an unsolicited offer to buy OpenAI for $97.4 billion that Elon Musk and a group of investors extended earlier this week.

Altman rebuffed it faster than a tech bro can work AGI into a conversation. Personal shots were fired, with Altman musing that Musk is an insecure, unhappy person and calling the Tesla CEO’s bid an attempt to slow progress at OpenAI (Altman also noted that Musk runs a competing startup, xAI).

While a grinning Musk might not be about to carry a sink into OpenAI’s HQ, the proposition could throw a wrench into Altman’s plans to spin off the for-profit ChatGPT-maker from its nonprofit parent organization.

Headache for Altman

The two tech moguls have been squabbling for some time: In 2015, a group including both of them co-founded OpenAI, but Musk left following a power struggle a few years later. He recently fired off a volley of lawsuits against OpenAI, accusing it of veering from its original nonprofit mission.

Now, Musk claims the nonprofit would benefit from a buyout:

• Musk’s lawyer says his client aims to acquire it to help it “return to the open-source, safety-focused force for good it once was.”
• A letter Musk and a group of co-investors sent to OpenAI’s board makes the case that the nonprofit deserves to be paid a fair price if it does give up its for-profit subsidiary.

The offer comes as OpenAI is reportedly close to raising $40 billion from SoftBank at a $300 billion valuation.

Even if the board rejects Musk’s ~$97 billion offer, it could still drive up the stake in the company that Altman and co. will have to give the nonprofit in exchange for relinquishing control—which would cut into the equity it can offer investors like Microsoft.

Unlike a for-profit company…which prioritizes shareholder value, legal experts say OpenAI’s nonprofit board has to weigh any acquisition offer based on compatibility with its mission.—SK