Sam Altman, CEO of ChatGPT developer OpenAI, expressed strong displeasure on the 11th (local time) by flatly rejecting Tesla CEO Elon Musk’s offer to acquire OpenAI.
In an interview with Reuters while attending the third AI Action Summit in Paris, France, Altman dismissed Musk’s takeover offer, calling it “ridiculous.”
However, experts analyze that the proposal may not just end up as a rejection and could have a significant impact on OpenAI’s governance reform and plans to attract additional investment.
“OpenAI has no plans to sell,” Altman said, strongly criticizing, “This is just another strategic attack by Musk to shake us up.”
In an interview with Bloomberg TV on the same day, he analyzed, “Maybe he’s trying to slow us down,” and devalued, “I hope Musk makes a really better product and competes, but all he’s shown so far is tactical obstruction, numerous lawsuits, and all kinds of bizarre actions.”
“His whole life seems to have come from anxiety. Honestly, I feel sorry for him,” he said, adding that he does not see Musk as a “happy person.”
According to the Wall Street Journal (WSJ), Musk’s legal representative reportedly delivered an offer to acquire a controlling stake in OpenAI for $97.4 billion.
“As OpenAI once did, we need to regain a positive influence focused on open source and safety,” Musk argued in the proposal.
WSJ analyzed that the acquisition proposal could put considerable pressure on Altman.
Altman is currently working on two major projects. It is to convert OpenAI from a non-profit corporation to a completely for-profit corporation and to attract $40 billion in funds from investors, including Softbank. However, analysts say that Musk’s unexpected proposal could complicate this plan.
The New York Times reported that Musk’s takeover proposal could delay the corporate restructuring that OpenAI has been pushing for for more than a year. Currently, OpenAI’s governance structure is in the form of non-profit corporations controlling for-profit corporations.
Altman is looking to transform OpenAI into a fully for-profit corporation by changing its governance structure, and is considering compensating a certain stake in the nonprofit corporation to do so.
Among them, Musk’s proposed acquisition of $97.4 billion has emerged as a variable.
Musk has measured the value of non-profit corporations’ control of OpenAI at $97.4 billion, which is likely to serve as a benchmark for the minimum amount the non-profit will require in future governance changes.
The WSJ analyzed, “Musk’s proposal is likely to reset the asset value of OpenAI,” and pointed out, “Non-profit corporations are obligated to sell assets at fair market values, which could make it difficult to convert OpenAI into a for-profit corporation at a lower price after Musk’s proposal.”
If a non-profit corporation approves OpenAI’s transition to a for-profit corporation for less than Musk’s offer, it could also face an audit by regulators.
OpenAI is already under surveillance in Delaware, where it is registered, and California, where it is headquartered, in connection with the transition to a for-profit corporation.
Musk’s takeover offer is also likely to affect OpenAI’s investment attraction.
Softbank plans to invest $40 billion (about 54 trillion won) on the premise of OpenAI’s conversion into a for-profit corporation, and is expected to secure a certain stake after the investment.
However, as Musk’s intervention destabilizes OpenAI’s control and legal governance structure, SoftBank is likely to review its investment plans.
“Musk’s intervention is complicating OpenAI’s plans for additional financing,” the NYT said.
The conflict between Musk and Altman is nothing new. Musk co-founded OpenAI with Altman in 2015, but in 2018, he stepped down from the board and divested all of his shares.
Later, when OpenAI launched ChatGPT, Musk launched his own AI startup “xAI,” accusing it of political bias.
In 2023, OpenAI filed a lawsuit against the original goal of “developing AI for mankind” and focusing on profit-making.
Analysts say the acquisition proposal is also another tactical move by Musk to slow down open AI and strengthen his AI strategy. How Altman will overcome this pressure and protect the future of open AI, and the competition between the two giants over hegemony in the AI market is expected to intensify.
EJ SONG
US ASIA JOURNAL
