Stupor and trembling last night in the small world of Silicon Valley. Elon Musk (via xAI) and a few investors emptied their pockets to find $97.4 billion and buy OpenAI. An unsolicited offer that has still not reached the board of directors, the only one authorized to decide whether the creator of ChatGPT can change hands.
The absence of the offer did not prevent Sam Altman from taking the lead. In an internal memo intercepted by Wired, the head of OpenAI reassures his troops: "Our structure exists to ensure that no individual can take control of OpenAI (...) Elon runs a competing AI company, and his actions do not concern OpenAI's mission or values." In other words, Musk wants to buy OpenAI for reasons that have nothing to do with its original mission.
Should Elon Musk’s proposal ever come through, the board plans to reject it. That likely won’t dampen Donald Trump’s support. He believes that “it’s time for OpenAI to return to being the force for good, focused on open source and security, that it once was,” he said in a statement sent to the site.
What Musk wants to buy is all of OpenAI’s assets, including its nonprofit structure, which retains strategic control over the commercial portion. Musk, co-founder of OpenAI, has been accusing the company of betraying its initial commitment by becoming a dominant player in generative AI for years and has already sued it several times.
For his part, Sam Altman is trying to move OpenAI towards a for-profit model, but to do so he needs to assess the price of its assets. He is currently in talks with SoftBank for a $40 billion investment, which would bring the valuation to $300 billion (almost double what the company is “worth” today).
Elon Musk’s offer puts a spoke in Altman’s wheels by setting a floor price for OpenAI’s assets. If the board agreed to sell OpenAI to Altman or an entity he controls at a lower price, it could be accused of breaching its fiduciary duty.
The board has no legal obligation to maximize investor profits, but it does have a duty to ensure a fair valuation. With its nearly $100 billion offer, Musk is making it harder for Altman to close his own financing package at a lower price.
Source: Wired
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