Is Elon Actually Trying to Buy OpenAI?
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Dave Farenthold, who's an investigative reporter for The New York Times, saw the tweets. I did. I did see that. Elon Musk says he wants to buy OpenAI, Sam Altman's company. So Elon is leading this group of investors who say they are offering $97.4 billion for OpenAI's controlling nonprofit,

Altman says, no way, and tweets, no thank you, but we will buy Twitter for $9.74 billion if you want. To which Elon replies, swindler. Feels very classic, very mature. But what, if anything, as someone who's been following this story, does the tweet war tell you? Oh, two things. On a personal level, you're right. These are people who are...

You know, this is not the old model of tech or of industry executives. These are some of the most powerful people in the most, you know, powerful technological spaces in our country. And they are just tweeting insults at each other like, you know, 12-year-olds. Sam Altman, just to remind you, is the CEO of OpenAI and really the public face of AI in this country since his company released ChatGPT. And Elon is, well, you know who Elon is.

These guys go way back, and they do not like each other. I mean, Altman, a 39-year-old billionaire, went on TV this week and said Elon Musk operated from a place of insecurity. I feel for the guy.

It does show you that something that had been kind of a Silicon Valley rivalry for a long time between these two men has now become something that's really important for the future of AI and the way that AI is run in the U.S. So yeah, this is sort of a petty back and forth between these two people acting like children, but what they're talking about is something that could really matter to all of us, everybody who's affected by the way that AI works.

It's also a power play. Elon Musk is using the levers of business in much the same way he acts online and in his new role in the White House. It's not even clear he really wants to buy the company. I didn't think of it as a real offer, but knowing the sticking points that OpenAI was going to face, this was sort of the perfect thing you could do to make that process much, much harder. ♪

Today on the show, Elon Musk's bid for open AI is another flex of his newfound power under Trump. Will it work? I'm Lizzie O'Leary, and you're listening to What Next TBD, a show about technology, power, and how the future will be determined. Stick around. Have you heard about double nomics? It's okay if you haven't. It's extremely niche and practiced by Discover.

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So let's kind of set the table a bit and do a little history before we get deep into some of the complicated stuff in the background here. Sam Altman and Elon Musk go way back. Could you tell me how that story starts?

Both were involved at the start of OpenAI. And OpenAI, I think most people only know about it because of ChatGPT, what it's become in the last few years. But it began as something much more innocent and sort of aspirational.

which was they started a nonprofit, a charity, that said, our goal is to build artificial intelligence for the benefit of humanity. We think there are lots of people out there who only care about making money from artificial intelligence, and that leads us down to the path of Skynet and Terminators, and we don't want to do that. We want to build AI that only thinks about the benefit of humanity and doesn't think about profit.

So they were partners in that initially when OpenAI began. Then things take a turn and the structure of OpenAI begins to change. What happens next?

Well, what Sam Altman realizes is that artificial intelligence is really expensive. You know, you're basically spending millions and billions to buy computer servers, to spend time training your giant computer server complex on all the data on the internet. You can't do it for cheap, and you can't do it on donations, which is what they've been doing before. And so he had a choice. Basically, he could keep a nonprofit that would follow its ideals but not be very effective at making artificial intelligence, or

Or it could build a company and it could take in investors and huge amounts of extra money and maybe have a chance at building something that was really a world-leading AI software. So you're choosing between the aspirations of goodness and the aspirations of success. And it chose success.

So what he did basically was create another OpenAI, a for-profit company, not a nonprofit, that could take in investors and could promise those investors a return on their investment. And so he starts raising huge amounts of money, which he needs to start building something like ChatGPT. And the sort of the fig leaf of all of this, the way that they were able to square what they had

said they were going to be with what they really were, was that, oh yes, there still is a nonprofit called OpenAI. And even though that nonprofit doesn't own the computer servers and doesn't employ the people who work at OpenAI, we're going to say that on paper, the nonprofit controls the for-profit. And so it's like this sort of permanent in-house conscience.

And if we ever start heading down the path of Skynet and Terminators, then the nonprofit will step in and stop us. Like, yeah, we've still got a $10 billion investment from Microsoft, but hey, there's a nonprofit over here. Right.

How did Elon feel about that? Elon Musk thought that was cheating, basically. He thought that Sam Altman had taken something that was a nonprofit that had tax-deductible donations that had been started with these great ideals in mind and had turned it into something that was just going to benefit him. Elon thought that Sam Altman had become what he promised had never to be, which is somebody who cared about profit first and humanity second.

So Elon started this campaign of saying, you know, yes, Sam Altman looks like he's succeeding. Yes, he claims to be so virtuous, but he's just using that sort of morality as a shield to hide the fact that he's just out for profit. This is where Dave's expertise in covering nonprofits is so important.

Stick with me here for a sec. Just two years ago, Sam Altman was fired by the board of OpenAI's controlling nonprofit. They felt that Sam had lost the initial vision of OpenAI and was prioritizing profits over safety. But then, in a dramatic turn, he managed to come back and stack the board with his allies. Once he'd done that, his goal was to turn all of OpenAI into a for-profit company.

I asked Dave to walk me through how that would happen. So the for-profit...

part of it, is going to buy the assets of the nonprofit. And the asset that we're talking about is not a thing, a tangible thing. The nonprofit has very little tangible assets. It has two employees. It has $20 million in the bank. It's tiny. The asset that's really for sale here is the control of OpenAI. The for-profit is saying to the nonprofit, hey, I want to buy control of myself back.

I want to pay my conscience enough money that it will just go away and I'll have full control of the for profit will have full control of itself. So is Elon's offer an attempt to mess up the process of going public or is it an attempt to put a price tag on the idea of control of the company? The answer is it's really both. And I'll explain why.

The key question that has to be answered if the nonprofit is going to sell this control to the for-profit is, what's a fair price for that?

The nonprofit under the law can't sell something to somebody else for less than market price. It especially can't sell something to a for-profit that it's very closely related to. The board of the nonprofit is close to Sam Altman. It looks like there's a potential for a sweetheart deal here. So the nonprofit, if it's going to sell control to the for-profit, it has to be able to show regulators...

I got a fair price. The question is, what's that fair price? But this is not a building or a car or an old donated Volkswagen that you could say, okay, there's an easy way to figure out from comparable sales what this thing is worth. What is like this? I talked to people who said, it's like control over the atomic bomb. If you had the chance to control the Manhattan Project in 1944, what would you have paid for? It's a technology that could potentially change the world. If you're a doomer, it could destroy the world.

So how do you price the control of a company like OpenAI? And so the negotiations that have been happening so far had been like trying to set a price on that. And what Musk is doing here is saying, hey, you know, I think you're going to lowball this price. I think you're going to set a price that is too low. You know, this is really an insider deal. Sam Altman doing a deal with his friends.

I'm going to come in and tell the world what I think the price is. The price is $97 billion. And so now later, if you want to say the nonprofit has sold control to the for-profit for $40 billion, $25 billion, whatever it is, then a state regulator could come in and say, hey, you didn't get anywhere near market price. Look, here's what somebody's saying what the market price is, and you sold it for much lower than that.

It looks like a troll by Elon Musk, but it's actually very, could be very effective in sort of forcing open AI, the for-profit, to pay a lot more money out than it would have. Right. It is both trolly and obnoxious. And like he has found, he being Elon Musk, has found a weak point and has put his finger on it and is just pushing.

Yeah, he would say it's obnoxious already that open AI is trying to wrest control of itself from this for-profit. You know, when Sam Altman is on both sides of the deal and he's not going to pay enough. So I'm just showing the world how much he really ought to pay. It's a righteous troll in his mind. After the break, what all of this has to do with Donald Trump and the U.S. government.

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Hi, this is Dahlia Lithwick, host of Slate's legal podcast, Amicus. On our recent episode, Trying to Undo a Coup in the Courts, former federal judge Nancy Gertner raised the alarm about an unfolding constitutional crisis. You know, if the court tells them to stop, that they'll say, "The hell with it, we're going to continue." Sue me. Sue me some more. President Trump's administration and his unelected oligarch sidekick, Elon Musk, are losing in court a lot.

But will that slow their roll? Listen to new episodes of Amicus with me, Dahlia Lithwick, every week. Subscribe to Amicus wherever you get your podcasts. Guess what? Sam Oldman is not the only person in this drama who does not like Elon Musk. The chairman of the board of OpenAI is a guy named Brett Taylor. And coincidentally, he was also the chairman of the board of Twitter when Elon bought it.

Suffice to say, that was not a pleasant experience for Brett Taylor. It was whatever the corporate version of traumatizing is. I asked Dave if, given this history, the OpenAI board would really entertain Elon's offer. I don't think they're going to entertain it. And...

But to tell you the truth, this is an interesting parallel to Twitter. I don't think they have to entertain it. I'll tell you why. I mean, I don't think they have to entertain it, but I don't think they have to say yes. With a public company, they did actually have to entertain an offer because they had a fiduciary duty to their shareholders. Exactly. A public company, if someone offers you more than what you think is a good deal for your shareholders, this is a classic case was this was Twitter. You have to take it. Even if you think it's going to be bad for the company, bad for your customers, whatever else, shareholders come first.

The nonprofit does not have shareholders. Instead, it has a mission. And so, you know, think of this like if your nonprofit was in charge of protecting like a beautiful wetland and somebody came in and said, I'm going to pay you $100 billion and bulldoze your wetland. You couldn't take the money because you would have been sacrificing the mission you were created for.

So they will probably argue, you know, it would be against our mission, which is to build AI for the benefit of humanity, to let Elon Musk be in charge of this because we don't trust him. So there's not a forcing mechanism like fiduciary duty where they would have to take it or, you know, they might have to really consider it. I think they will say no. But I don't, as again, I don't think it was Musk's ambition really to take it over. I don't think he thinks this will really be accepted.

He's just putting a marker out there that's going to screw up Sam Altman down the road when he tries to get his own transaction approved. On Wednesday, Elon Musk said in a court filing that he would pull his offer for OpenAI if it stayed a nonprofit. I think someone could listen to this and perhaps fairly say, I don't care what these two rich guys do. They're both being ridiculous. Why should they care?

The reason you should care is that these are two immensely powerful people, Sam Altman and Elon Musk, who have a huge influence on a part of our lives that I think is going to become even more important. AI is such an important or potentially important factor in the rest of our lives, and it's controlled by such a small number of people right now, including these two. And

And what they're doing is basically fighting over who they think is best qualified to shepherd us into that future without killing us all or without, you know, changing society in this really dramatic way.

It's not that encouraging that both of them, you know, both of them who have cast themselves as like the potential steward of humanity into the AI future, that both of them are acting like children who are not used to getting there, you know, to being told no. But it is important for us to understand who these people are and what they're fighting over, which is potentially a really influential technology. So now I think we have to talk about politics and policy because

Because obviously, Elon Musk is close to President Trump. He has Doge. He's literally holding press conferences from the Oval Office. Sam Altman has also donated to the president. He is a part of Stargate, this AI partnership thing that the president announced. Is there a way to parse out how much of this is about Trump?

rivalry vis-a-vis President Trump and how much of this is about I will be the person who shapes AI policy going forward.

I mean, I think those things are, those goals are related. Both of them see themselves as the right person to steer AI in the future. And both of them see President Trump as sort of a mechanism to achieve that success. So Elon Musk obviously put a huge amount of money into, you know, helping elect President Trump. Yeah, almost $300 million. And never physically left his side effectively since he took office. Yeah.

And I think he believed that would give him primacy in this long rivalry with Sam Altman, who had always been a Democratic donor. But Altman seems to have taken advantage of Trump's transactional nature by, you know, giving to his inaugural fund, showing up at this event, the White House, you know, giving Trump the credit for this big investment he did, the Stargate investment.

So Trump has not shown loyalty to Elon Musk, perhaps not surprisingly, in the way that Musk might have wanted in saying, you know, Elon Musk is the right guy for the future of AI. Sam Altman should be, you know, kept out. But they are also fighting over the future of AI regulation, which has been in the news a lot this week with this conference in Paris.

both of them want to shape the future of regulation in a way that helps them and hurts the other guy. And for them, both Trump is a means to an end for that. Isn't Elon like a little busy right now? That's a thought I've had so many different times. I mean, if you recall, there was a great story. I forget who wrote it about how Elon is also setting records for video games. Like he's winning video games at the same time. He's actually cheating. Yeah. Drew Harwell at the Washington Post wrote that one. Elon Musk is...

is spreading himself very widely. I don't want to say thin, but he's spreading himself very widely. And yet he's at the same time, he's basically running the government or changing the future of the government. He's also trying to engineer this deal, if you believe it on its face, to take over one of the most important companies in the U.S. So yes, he is everywhere all the time, or at least he's trying to be. One could zoom out a little bit here, and I don't want to get too galaxy brain, but...

You could look at what is happening with Doge and connect the speeches that have gone on in the General Services Administration saying this is going to be an AI-first agency and say, well, wait a minute. Is this all a part of a plan to winnow down

the manpower in the civil service and replace it with AI. And if you are winning the fight over who's going to control the big AI company in the country, does that slide you into place to be in charge?

It's a great question. And that is something that Musk has talked a lot about, using AI to make government decisions or replace government workers. So far that I know of, he hasn't said it should be my AI company, but you're right that he's certainly in a prime position. Trump is letting him do effectively whatever he wants to.

with a federal bureaucracy. Yes, that is something that I worry about, that we're seeing those two streams of Elon Musk's work will converge and it'll be his AI company that has the power going forward. Not just him who's replacing and reshaping government now, but it's him who'll have this permanent role because when you, you know, write to the IRS helpline, you'll get a response from his AI company. Or when you apply for a defense grant, you know, defense contract, your contract will be analyzed by his AI company.

When you talk to people about this deal, do they think that's a possibility? That is a possibility. We haven't seen any guarantee that that is happening now. But if that's the way that Elon Musk is conceptualizing filling the hole that he's going to create in terms of government capacity and knowledge is to use AI, we have not seen so far from him any...

sense that because he has this power in government, he shouldn't also be a vendor to government. In fact, we've seen quite the opposite. Yeah. A lot of what he's done is to try to, you know, a lot of his concept of what Doge should do is like, let's clear out the regulations that hurt my specific businesses. So no, I don't think we've seen any sign from him that there's a, there should be a wall between his business persona and his role in government. In fact, he seems to see them united. What's the next step in this story that you're going to watch?

Well, so the immediate first step is going to be, I think, that the OpenAI board will reject this offer. Is it actually an offer or is it just talk of an offer? I think it is really an offer. But the bigger question is, how is OpenAI going to, you know, if they're going to go ahead with this plan of selling control from the nonprofit to the for-profit, how are they going to do it? What price are they going to pay? How are they going to satisfy regulators in Delaware and California, which is the

to the two states so far that say they want to oversee this, that they paid a fair price. And if that price is high enough, they end up having to pay $100 billion to this nonprofit just to get control. Does that hamper their fundraising, their profits down the road? Is that sort of a permanent weight around the ankles of OpenAI going forward?

As someone who watched every twist and turn of the Twitter acquisition and many rounds of court battles that ensued, this feels like it could be long and bumpy. It will be. And I think Elon Musk has tried to insert himself at every phase and will continue to, to try to make it as long and bumpy as possible. David Farenthold, thank you so much for talking with me. Thank you.

David Fahrenthold is a reporter for The New York Times. And that is it for our show today. What Next TBD is produced by Patrick Ford, and our show is edited by Evan Campbell. TBD is part of the larger What Next family. And if you're looking for more great Slate podcasts to listen to, you should check out tomorrow's Slate Money, where they discuss whether bribery is back in

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