Elon Musk wants to buy OpenAI and that partly has to do with the vendetta he has against OpenAI CEO Sam Altman.
This fiery feud isn’t going away anytime soon.
My bet is that it will burst into the open and OpenAI is actively attempting to put the governance in place to block Musk from seizing the company.
The issue Musk has with OpenAI is that it was founded as a non-profit from capital Musk gave.
It was responsible for doing what is right for humanity, but Altman’s attitude to the industry shows the inverse of that.
It appears to the outsiders that Altman is hellbent on driving the price of AI up for the consumer and delivering profits to big tech that have invested into his “non-profit.”
Musk’s recent attempt at an unsolicited takeover was rejected by CEO Sam Altman and OpenAI's nonprofit board.
Now the creator of ChatGPT reportedly wants to make sure that there are indirect poison pills associated with any outsider takeovers.
All of that will take some maneuvering by OpenAI’s board members and Altman, all of whom are defendants in a lawsuit from Musk that seeks to block OpenAI from converting to a for-profit business.
Right now, investors like Microsoft are not equity holders in OpenAI but instead hold limited profit interests in OpenAI's for-profit subsidiary. Once OpenAI is profitable, Microsoft is entitled to 75% of profits until it recoups its $13 billion principal investment. The other 25% of profits go to employees and early investors, up to specified profit caps.
Once Microsoft’s principal is repaid, it is entitled to 50% of its profits until it reaches a profit cap of $92 billion.
OpenAI said it wants to convert its nonprofit parent to a Delaware public benefit corporation (PBC) that would issue ordinary shares of stock.
Charitable organizations aren’t typically targets for hostile takeovers, especially not the type that Musk had in mind — an unsolicited $97.4 billion bid for OpenAI’s estimated $157 billion in intellectual property and other assets.
Musk's lawsuit seeking to prevent OpenAI's conversion to a for-profit enterprise centers around Musk's initial $45 million donation to fund the startup, which he claims was contingent on OpenAI remaining a nonprofit organization.
If Musk ever acquires OpenAI, I believe he will put on his DOGE hat and cut the costs of doing AI.
The genie is now out of the bottle and the Chinese have proved that AI doesn’t need the bloat.
AI can run on cheaper and older chips while not needing the same amount of data centers.
My belief is that Musk wants to democratize AI and make it cheap for everyone and that would be bad for tech shares specifically Nvidia and Microsoft.
Big tech has the incentive to make the price of AI high just like the supermarkets have an incentive to place higher prices in the supermarkets.
Don’t believe in this mumbo jumbo of supermarkets operating on thin margins when they do produce a lot of their own house brands.
Musk wants to take a samurai sword to AI and make it applicable to the average American.
He doesn’t want to see a situation in which AI is used by executives at corporations to fire everyone, and the readers should know that we are barreling right down the path of replacing workers with robots right now.
If Musk ever gets into the position of neutralizing OpenAI, sell your tech stocks right away, because there will be less peaks and more valleys in tech share prices after that.
