OpenAI CEO Sam Altman has declined Elon Musk's offer to buy the nonprofit assets that control the AI company. This is the latest in a string of moves by Musk against Altman since he left the board of OpenAI in 2018.
On Monday, Musk's attorney, Marc Toberoff, submitted a bid from a consortium of investors led by Musk's xAI to buy OpenAI for $97 billion. The investors included Valor Equity Partners, Baron Capital and Vy Capital. If a deal were to happen, xAI could merge with OpenAI.
Altman responded to the news by posting on X, formerly Twitter: "no thank you but we will buy Twitter for $9.74 billion if you want."
OpenAI vs. Musk and critics
The bid for OpenAI is the latest move in the public feud between Altman and Musk.
It started after Musk left OpenAI's board and stopped contributing to the company one year later, and intensified when Musk sued Altman and OpenAI for breaching the organization's founding agreement. He alleged that OpenAI was founded to be a transparent, nonprofit aimed at developing artificial general intelligence for the good of humanity. But that changed when OpenAI began partnering with Microsoft and with its release of GPT-4, as OpenAI began its transition into a for-profit entity.
Musk, whose historical interest in OpenAI becoming a for-profit is murky, has been a critic of OpenAI's practices, but he is not the only one. Many have criticized the vendor's unwillingness to be more transparent with how it trains AI models, while others have claimed the vendor has blatantly stolen copyrighted material.
It begs the question of whether a Musk-led OpenAI could lead to more open models from the AI vendor.
A new OpenAI
"It's hard to say," said Michael G Bennett, associate vice chancellor for data science and artificial intelligence strategy at the University of Illinois Chicago. "[Musk's] personal position on openness versus closed systems is relatively clear." He added that the bid involves a group of investors, and that the direction in which they want to take the company is unclear.
"I'm not sure that they even know," Bennett continued.
Moreover, it's unclear whether the AI ecosystem would benefit from such a merger since competition -- not consolidation -- could push more organizations to explore and find out ways to govern AI systems, according to Bennett.
Plus, while OpenAI's history with openness and its mode of operation has been criticized, it also led to significant innovation.
"OpenAI started as a nonprofit but had it remained as a nonprofit, it would not have become the dominant AI company it is today," said Kashyap Kompella, CEO of RPA2AI Research. "Deep learning requires deeper pockets."
If Musk takes over, it will be a disaster.
Andy ThuraiAnalyst, Constellation Research
A Musk-run OpenAI could also lead the vendor to become less careful in the way it previously released AI systems, according to Constellation Research analyst Andy Thurai.
"If Musk takes over, it will be a disaster," Thurai said. He pointed to Grok AI, xAI's large language model, as an example. The model is trained on data from X and has limited guardrails.
"In the name of free speech, AI is let run amuck," Thurai continued. "While OpenAI is not necessarily known as the leader in any of these categories, at least they exercise some caution."
He added that Musk might continue the business model he took with X by maximizing the profit angle without worrying about little else.
Profitability and distraction
While Altman has said "no" to Musk, others will likely continue to offer money to buy the AI vendor, said Mark Beccue, an analyst at Enterprise Strategy Group, now part of Omdia.
"If I were evaluating it as a company, I'd say what's the path to profitability," he said. He added that, for now, that path seems to be IP.
Currently, OpenAI is negotiating with Microsoft and others for equity in its for-profit business model. It is also in talks to raise $40 billion in a new funding round.
Regardless of OpenAI's future, Musk and Altman's squabble isn't a good look for the AI market, according to Bennett. It seems especially distracting in light of the Artificial Intelligence Action Summit in Paris underway this week, where government officials, organizations and businesses gather to discuss AI in terms of safety, governance and sustainability.
"We kind of need more from the titans of AI right now than this type of squabble," he said.
Esther Shittu is an Informa TechTarget news writer and podcast host covering artificial intelligence software and systems.
