SAN FRANCISCO (AFP) – The feud between Elon Musk and Sam Altman has become one of the bitterest rivalries in business history, with the Tesla tycoon bidding to buy Altman’s OpenAI in an apparent attempt to derail the ChatGPT maker’s ascent to becoming one of the world’s most important companies.
OpenAI’s unusual structure — a non-profit with a money-making subsidiary — reflected its idealistic origins as a counter to Google.
However, the massive costs of designing, training, and deploying AI models have forced the company to seek a new corporate structure that would give investors equity and provide more stable governance.
This need for stability became particularly evident after a 2023 boardroom coup briefly saw Altman fired, only to be reinstated days later following Microsoft’s intervention.
The transition to a traditional for-profit company requires approval from California and Delaware authorities, who will scrutinize how the non-profit arm of OpenAI is valued when it becomes a shareholder in the new company.
Current investors prefer a lower valuation to maximize their share of the new company.
Musk’s bid, valuing the OpenAI non-profit at USD97.4 billion — approximately USD30 billion above current negotiations according to The Information — appears designed to disrupt the company’s fundraising efforts.
“Overall this is Musk’s attempt to hurt OpenAI’s conversion into a non-profit to slow them down. I doubt Musk’s business rationale for the bid will play out in his favor,” said Lutz Finger , visiting senior lecturer at Cornell University.
Musk’s latest move to undermine his former ally came shortly after Altman made an appearance at the White House, announcing his involvement in Stargate, a Donald Trump-sponsored AI infrastructure project partnering with Japan’s SoftBank.
Musk, who plays a central role in the Trump White House, immediately criticized the $500 billion AI project claiming the funding wasn’t secured in an apparent dissension with the president.
Facing the barrage of hostility from the Tesla billionaire, Altman has increasingly suggested that Musk’s actions stem from regret over leaving OpenAI in 2018, particularly as Musk’s competing venture, xAI, struggles to gain traction despite massive investments.
“He’s just trying to slow us down. He obviously is a competitor,” Altman told Bloomberg TV.
“I wish he would just compete by building a better product…. Probably his whole life is from a position of insecurity. I don’t think he’s a happy person. I do feel for him.”
