Critics of capitalism have often argued that ambition, selfishness, or greed were the main motivations and raison d'être of entrepreneurs. The pursuit of profits at any cost, regardless of the consequences. But in business, as in what truly matters in life, all kinds of motivations fit. Fame, power, envy, hatred. Or all of them at once, as perfectly reflected in the offer of 97.4 billion dollars (94.5 billion euros) that Elon Musk launched on Monday to take control of OpenAI, the leading artificial intelligence company led by his former friend and partner Sam Altman.
Musk's unfriendly offer, leading a broad group of investors, has many facets. As soon as it became public, Altman, without even knowing the details, responded, using Musk's social network, "no thanks. But if you want, we can buy Twitter for 9.47 billion." The world's richest man, on the same platform, repeatedly called him a "fraudster". There is a personal story behind the moves, of disdain, revenge, ego battles. But there is much more, and insults or jabs, like Altman saying that his enemy is "an unhappy man" and "insecure in his whole life" and that he feels "sorry" for him, can become a smoke screen.
"I think he's probably just trying to slow us down. Obviously, he's a competitor (...) I would like him to compete by simply creating a better product, but I think there have been many tactics, many, many lawsuits, all kinds of other crazy things, and now this," Altman summarized on Tuesday morning in an interview with Bloomberg from Paris, where he is attending a summit on artificial intelligence convened by Emmanuel Macron and attended by U.S. Vice President J.D. Vance. Altman does not have equity in OpenAI, but the board has discussed giving him up to 7% even when the ongoing transformation concludes, which would amount to billions of euros.
Musk, who hypocritically claims to defend OpenAI's non-profit spirit, knew perfectly well that although the amount he put on the table is significant, and implicitly carries the approval and endorsement of Donald Trump, Altman would say no. Because he does not want to lose control, because he does not want his archenemy to take over, and because soon, if the complicated puzzle in front of him manages to fit together, the value of OpenAI will be double or triple those 100 billion dollars. Even if the market and the board members consider the price fair and good, OpenAI theoretically must comply with its legal mandate, which is currently "to promote artificial intelligence safely for the benefit of humanity," not to benefit shareholders. Ironically, at the helm of that board is Bret Taylor, who was part of Twitter's board when the owner of Tesla or SpaceX acquired it.
Musk, who has shown in some of his businesses that he is willing to make million-dollar sacrifices or gambits thinking about the future, wants OpenAI, but if he cannot have it, at least not now, he wants to put as many obstacles in its way as possible. And for that, the two best ways, which he is skillfully combining, are the legal route and what he did this Monday.
If Altman and the OpenAI board, which in October 2023 ousted him in an incredible soap opera because they did not trust him and his intentions, accept the offer, he wins. If they do not, but he manages to muddy their plans to split the company into two parts, one for profit [created to secure funding even though it is similar to an NGO] and the other, the one with power, non-profit, as it originally started. Or if he manages to increase the cost of the transformation and slow down its development through lawsuits and tricks, while Musk's own venture, xIA, advances and regains ground [like when he signed a public petition to suspend AI advancements supposedly due to safety concerns]. Victory is also achieved, even if partial.
AI is the path to tomorrow. Musk could not control OpenAI from within, so he left the venture in 2019, four years after creating it with Altman. So he tries to do it from the outside. "Our structure ensures that no individual can take control of OpenAI. These are tactics to try to weaken us because we are making great strides," Altman wrote in an internal message on Monday.
The purchase offer is a variant of the Trojan horse. Altman has a flagship product, the interest of the entire planet, many investors willing to open their wallets for a piece of the pie. But he has to square a circle: how to adequately compensate the non-profit organization that controls the company as part of the plan to split it and turn the ChatGPT developer into a for-profit company. Musk, Meta, and others have long been denouncing that Altman's move would undervalue it so that his part becomes more substantial, and that is why they have taken the case to the courts in California, where it is based, and Delaware, where OpenAI is incorporated.
Inevitably, Musk's and his friends' 97.4 billion dollars put significant pressure on the OpenAI board of directors and the balances. The higher the valuation of the non-profit part, the greater their stake in the for-profit organization or cash compensation must be. And now there can be no vague estimates, because the 97.4 billion set a very high floor. And they only have two years to complete the transformation and restructuring, or they will have to return all the money raised.
Similarly, this valuation figure affects those who are already part of the businesses and the investors being attracted in successive rounds. OpenAI is not publicly traded, so valuations are made through financing rounds, which show what market agents estimate. In October, OpenAI raised over 6 billion, which gave an indicative valuation of around 160 billion real value. But it is finalizing a deal for a Japanese financial conglomerate to contribute an additional 40 billion, which would push the valuation above 300 billion dollars.
As if that part were not complicated enough, OpenAI is negotiating how much stake Microsoft, its largest investor to date and one of the reasons for Musk's anger, should receive in the for-profit company, along with other participants and employees. It is expected that not only Microsoft but also future investors will claim a significant portion of the capital when OpenAI formally becomes a company and not a foundation. Satisfying all these parties had already proven to be a nightmare, but now Musk will likely force an increase in the capital that should go to the non-profit organization. Chaos. Not to mention the courts, which must ensure that the compensations are fair. If Altman hoped to aim low, his major rival has raised the bid.