Musk Organizes $97.4B bid for OpenAI - DTNSB 4954
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This is the Daily Tech News for Tuesday, February 11th, 2025. We tell you what you need to know, follow up on the context of those stories, and help each other understand. Oh, my friends, today Ron Richards and Tim Stevens here. But not talking about Android or cars, they're telling us about preserving the technology of pinball. And we also got more from your emails.

I love pinball nerdiness, so I'm looking forward to that. I'm Jason Howell. I'm Tom Merritt. Let's start with what you need to know with the big story. Big story it is. Elon Musk's ex-AI company, along with a number of investment funds, have submitted an unsolicited $97.6 billion bid to merge with the assets of OpenAI's non-profit business. This story gets a

A little confusing, but we'll get there. OpenAI's Sam Altman posted on X, quote, No, thank you, but we will buy Twitter for $9.74 billion if you want. And that is obviously a not so subtle jab at X's steep drop in value since Musk acquired the company in 2022.

Now, OpenAI's director, Larry Summers, did say this morning that he has yet to receive any sort of formal bid from Musk. So that might be saying something. OpenAI is already in the midst of a complicated conversion from a nonprofit to for-profit business. They're targeting the end of 2026 for that. This offer could in turn impact the valuation of the company.

and potentially complicate the process further. Though Summers did say that without an actual bid, it's far too soon to speculate on that. They don't want to talk about it until they absolutely have to, in other words.

If this sounds familiar, it does have a little bit of history, a little bit of backstory to put some of this into more context. I think it's a really interesting kind of thing to compare it against. Back in the PayPal mafia days, Musk's original X.com company, as well as Peter Thiel's PayPal back then, were both working to be kind of the premier quintessential online bank on the internet.

And instead of continuing to compete because they were losing all sorts of money in the process, they ultimately merged. And that then led eventually, if you know the story, to Elon Musk being replaced by Thiel as CEO. Probably didn't feel very good to Musk at the time. Now we have a very similar war happening with AI. We've talked a lot about deep seek.

That appears to be placing downward pressure on companies like OpenAI. That's impacting their potential value in the marketplace, right? And everybody's responding to that. If Musk is successful with this effort, it could actually be kind of like a return of that playbook. It could force OpenAI's board to feel compelled to consider and even accept an offer. And Altman might become the CEO of –

replacing, sorry, Musk might become the CEO replacing Altman if that were to happen, which might be kind of like Musk finally feeling like he gets his comeuppance. I don't know. But anyways, it's an interesting correlation to draw. Tom, you did an entire episode on the OpenAI part of this story. What can you tell us about this drama that's unfolding right now? Yeah, yeah. The OpenAI part of this story, I think, is important to being able to understand the

uh, if you're a consumer, what this means is like, Hey, am I going to be using chat GPT under a different owner in the future? And I think the chances are very low of that. Uh, but, uh,

if you're like, okay, well, if you don't think open AI is going to accept Musk's offer, why is he doing it? Right. The key knows that they don't want him to be there. Altman wouldn't stick her. I guess that's one difference with the PayPal stories. Altman wouldn't stick around the way Musk did at PayPal. Yeah. That's true. Uh, and he'd peace out. Yeah. And so there's lots of things that the board can do to, to decline this offer. Hmm.

My gut feeling is like, yeah, there's not very much of a chance that they consider it and then find it compelling and have to accept it. But one of the reasons for that is...

open AI structure. And that's where that episode of know a little more comes in to play. Open AI is a nonprofit company. That's what Musk and Altman and all the rest of them. There were a bunch of founders and Musk and Altman are always the ones people talk about, but there was a group of people who formed open AI as a nonprofit company with the charge of creating safe AI. They were worried about AI going rogue and doing dangerous things. So they wanted to create something to create safe AI. And, and,

in the course of events money got tight they started to need to uh to you know find new ways of raising money uh and at one point musk suggested why not make me ceo i can do that uh the board at that time said no thank you and so musk took his toys and left uh and eventually took his stake away he

He's now suing open AI's nonprofit saying you aren't living up to your original charter. You're not doing this to protect safe AI. You're considering profits to be more important than that.

Which, by the way, is something that I do in all other facets of my life as well. But anyways. Yes, all of us do, right? It gets complicated, but if you're like, wait, OpenAI is non-profit? How does that make sense? After Musk left, Altman and others created a for-profit subsidiary of OpenAI. Right.

Okay. This is not unusual. Mozilla actually does a similar thing. Firefox is for profit, but Mozilla is not. Mozilla has a for profit arm. There's other examples out there. That's not the controversial part. And if you're like, wait, I thought Microsoft owned part of OpenAI. Microsoft has an ownership stake in the for profit arm of OpenAI, but not the nonprofit arm of OpenAI. And here's the key.

It's profit capped. There's a limit on how much profit any investor, even in the for-profit arm, can make. They don't have control of the company. They don't have that kind of share. And there's a limit on how much money they can make. And I know you financial types out there are probably like, it's more complicated than that. You're right. But that's the simplistic version of it. What Altman is talking about doing is,

is converting things to say, we'll keep the nonprofit, but we'll kind of turn that into a charitable foundation and we'll release the for-profit arm to be fully profitable so that if you invest in it, you can get no limit on your profits back. And that'll encourage more investment, et cetera, et cetera. Uh, and this brings us back to the musk of it all. Uh,

This is going to affect how they value the shares they give to OpenAI. OpenAI's nonprofit arm is currently now valued by Musk at $97.6 billion, which might be a bigger value than they were planning on putting on it. So if we're getting back to the question of why did Musk do this?

It complicates that process of buying out the nonprofit arm of OpenAI and makes it more expensive and complicated and makes them have to consider this offer or at least show on paper why they didn't consider the offer, etc., etc., etc. Basically, it just makes Sam Altman's life hard.

Yeah. Okay. And that actually probably feels, you know, at least to a certain degree for Elon Musk as far as how he has reacted in the last couple of years when it comes to, you know, things like buying out Twitter and turning it to X. You know, a lot of it is kind of reactive, almost like a lot of the articles that I was reading, the word troll kept coming back.

kept coming up in relation to to this like is this an actual intention or is it just a true you know just trollish behavior on the on the on the side of elon musk and of course feels very trollish it feels a little trollish yeah totally yeah which doesn't mean not to take it seriously like it's totally happen that's he got other investors on board like he has a plan and

If somehow this ends up succeeding, I'm sure he will merge it into XAI, take all the technology OpenAI has, put ChatGPT under XAI. And he's got a plan for that. I doubt he even thinks that's how it's going to shake out. But he did the diligence or had people do the diligence to say, like, if they were to accept it, we've got backers, we've got investors, we've got a plan for that.

So it's not just typing on social media. I want to do this. Like he, he made it real, which actually makes it more complicated to deal with on open AI side.

Yeah, because at the end of the day – and we've already kind of mentioned this a couple of times – but at the end of the day, if a real deal is on the table and it's material enough, it's big enough, the board – they have to at least consider it. They have to crunch the numbers, and if it makes sense –

It's weird to think that someone would – Fiduciary duty. Totally. Fiduciary duty. They would be compelled to a certain degree. Although the fact that they are a nonprofit with this charter gives them a little extra out to be like, well, but we don't think he would benefit humanity. They could make that argument. So.

Yeah, totally. Fascinating. Well, we think you benefit humanity because you support us and we're humans. So we're very thankful for that. Daily Tech News Show is made possible by its listeners. Thanks to all of you, including Pat, Mike Cortez, Erwin Sturer, and we got new patrons, Dylan, Nathan, and Ryan. Right on. Thank you all for supporting us. Thank you.

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The two-day AI Action Summit in Paris concluded with 60 countries signing the final statement that pledged inclusive, open, safe, and ethical development of artificial intelligence in their countries. However, the United States and the United Kingdom did not sign the agreement. The U.S. objected to the language, and the U.K. seemed to find the wording too restrictive.

U.S. Vice President J.D. Vance urged the EU to prioritize growth over safety and warned against overregulation. We believe that excessive regulation of the AI sector could kill a transformative industry just as it's taking off. And we'll make every effort to encourage pro-growth AI policies. European Commission President Ursula von der Leyen talked about building AI that adheres to the EU's strengths.

Our own strengths are our science and technology mastery that we have given to the world. There's a distinct European brand of AI. It is already driving innovation and adaptation, and it is picking up speed. President von der Leyen said the EU will invest 200 billion euros in artificial intelligence in an effort to catch up to the progress being made in the U.S. and China.

Yeah. Some of what I read about this is, you know, that the EU has been so regulation forward when it comes to artificial intelligence and that perhaps now based on what was seen at this summit, is the EU feeling a little bit of regulation regret as a result? I'm going to get a French person's reaction to this and put it in tomorrow's show. I'm going to talk to Patrick Beja about this. That's a fantastic idea. You should do that.

And you will. Google Maps now reflects the renamed Gulf of America, formerly Gulf of Mexico, for users in the United States on mobile and desktop. So you should see that now. Google will still show the Gulf of Mexico for users dependent upon their location. That's pulled from their connected network, their SIM, their OS, a bunch of different ways.

Now, somewhat related to this is Google Calendar making some changes as well. Google Calendar has removed a number of cultural events from the optional calendar that lists holidays in the United States. Google says it made the changes after facing maintenance challenges that weren't, quote, scalable or sustainable. Google has returned to only showing public holidays and national observances provided by timeanddate.com. Yep. I...

I think the simplification of this is a reasonable explanation. The timing of it is interesting. Yeah, totally.

Roblox, Discord, OpenAI and Google are launching robust open online safety tools, or ROOST for short, a nonprofit aiming to build scalable, interoperable safety infrastructure suited for the AI era. The group plans to focus on child safety to start with free and accessible tools that any company, large or small, can use to recognize, analyze and report CSAM, child sexual abuse material.

In related news, Meta has a new partnership with nonprofit organization ChildHelp, creating a curriculum to empower middle schoolers with tools they need to spot online exploitation. The curriculum was developed with child safety experts from a lot of organizations, including the National Center for Missing and Exploited Children and the Department of Homeland Security, and entirely funded by Meta. They put up all the cash. Schools, parents, and organizations can access the lesson plans, interactive activities, and the videos for nothing. It's all free. Good stuff.

YouTube isn't just a mobile force anymore, according to CEO Neil Moen, who revealed in his annual letter that YouTube on TV has actually edged out mobile as the primary device for YouTube viewing in the United States.

In his letter, Moen revealed a plan to bring AI tools to creators, of course, for content ideation and finding new audiences, as well as a wider rollout of auto language dubbing functionality that was first tested with hundreds of creators beginning back in June of 2023. And YouTube also plans to start using machine learning to help determine users' ages to help craft age-appropriate content suggestions for them.

Man, I look at this and I actually tried subscribing to YouTube TV last month to just see what the integration with YouTube and YouTube TV, YouTube TV is their cable replacement service, was. They don't. They don't. They don't integrate them enough. They need to integrate them more because they're winning on TV already. Like, yeah. Why wouldn't I? Yeah, totally. Yeah.

Chinese electric vehicle maker BYD has revealed God's Eye, its next generation self-driving system that is bringing mass market vehicles the God's Eye, including coming to its affordable Seagull hatchback that costs 70,000 yuan or roughly $9,600 US. Sales of those models begin today.

Immediately following the live announcement, starting Monday, BYD's system created in-house brings features commonly seen in luxury vehicles. So you get remote parking using a smartphone and autonomous passing of slow vehicles to its most budgeted oriented EVs below $10,000 US. The company also announced its integration of DeepSeek's models into its smart car architecture. Okay, DeepSeek is now going auto, going full auto.

A global law enforcement operation, Phobos-Aetor, has led in the arrest of four Russian nationals in Thailand.

who are suspected of carrying out more than 1,000 ransomware attacks worldwide. These arrests are allegedly connected to the Eight Base Ransomware Group, which is a major affiliate of the Phobos ransomware as a service operation. They're accused of using Phobos ransomware to target many organizations, including, among all of them, very critical infrastructure here in the U.S., amassing $16 million along the way.

If you pay for Google One AI Premium for $20 a month, you're getting Notebook LM+. It's coming to everybody. First debuted for enterprise and Google Cloud users two months ago as part of Google Workspace. Plus offers five times more usage credits than the free version, along with shared notebooks for Teams,

And Google says the free version will continue to work exactly as it has while they aim to add meaningful features to the paid version so that you pay for it. Google is also working on a dedicated app for mobile, but there's no time on when that would be released. Yeah, they're feeling pressure, by the way, from OpenAI's DeepSea – sorry, Deep Research product as well. Yeah, and probably a little from DeepSync, to be honest. Oh, yeah, yeah, for sure. Absolutely. Aren't they all? Yeah.

Apple released iOS and iPadOS 18.3.1 as well as iPadOS 17.7.5 to patch a zero-day exploit affecting USB restricted mode. This is a security feature designed to protect locked devices from unauthorized data access.

The exploit potentially allowed attackers to bypass passcode protections and encryption that would give them access to a user's data. Apple indicates this vulnerability may have been used in targeted attacks against specific individuals. Similar updates have also been released for Mac, Apple Watch, and Vision Pro, though detailed security notes aren't available yet. Now, those are the essential things to know today. Let's dive a little deeper and follow up on something. What do we got?

Yeah, some great people to do that with, too. When you think pinball, you may not think technology, but there's a lot going on with the classic game that goes beyond just the flippers and the metal balls flying around. Tom sat down with pinball enthusiasts Tim Stevens and Ron Richards to talk all about it. This is part one of a three-part series where they discuss restoring old games.

I'm joined by two pinball enthusiasts today. Couldn't be happier. Tim Stevens, freelance journalist. Thank you for joining me. Hey, Tom. Great to see you. Thanks for having me. And Ron Richards, not only co-founder of Scorbit, but also co-host of Android Faithful right here in the DTNS family of podcasts. Ron, thanks for talking to us, man. Happy to be here, as always. Love talking pinball.

I have had this note on my reminders for months. I think ever since, Tim, your Ars Technica article came out that I'm like, oh, my gosh, I have to get these two together and just talk about pinball tech. So thanks for doing this. Let's start with the reverse engineering, the game preservation that you do, Tim. I think a lot of people don't understand what needs to happen there. They probably think, well, you just get a screwdriver and you tighten some things up. Like talk a little bit about what goes into reworking.

getting a game and preserving it.

Yeah, if you've never looked inside of a pinball machine, I highly recommend you look up some videos online to see what's going on in there because it's a pretty wild scene. The older machines before the 70s were electromechanical, a lot of moving cogs and circuits that changed the game logic. And then as you move into the 80s and 90s, they're still wildly complicated. And even modern machines today, the circuitry has gotten smaller, but still you're looking at a massive tangle of wires going on in there. And of course,

I think one of the challenges with these machines is that they were really only designed to last or to live in the wild for a year or two at most. They were basically disposable. And so for some of those of us who want to keep these older machines running, you know, a machine that's only supposed to last a year and is now 40 or 50 years old, those components are no longer available. So...

We've got breakable things like things on the play field, plastics, things like that, which ultimately, thankfully, are being reproduced. And those you kind of can't do at home. But we're seeing a really growing segment in the industry of people who are reverse engineering, even the PCBs, the circuit boards that control some of these machines, and

because all the schematics were out there. The manuals that these machines all came with were designed so that people could really kind of tear them apart and rebuild them if they want to. So there's a kind of cottage industry almost, I guess you could say, of kind of taking these machines, breaking them down to their bare bits, and then being able to rebuild them. So, for example, I'm restoring a Comet pinball machine, which I think was from 1984, 1985. And the PCB, the thing that really controls the logic of how the game works,

It was completely shot because the batteries that run the thing leaked and they destroyed the board. And, of course, you can't buy a 40-some-year-old pinball machine PCB anymore. But a gentleman on the Pinside Forum, which is kind of the largest place for pinball owners to hang out, reverse-engineered the circuit board and produced a new basically – I don't know the original thing, but with using additional –

And some other niceties are built into that as well. And I basically bought this raw piece from him, went to a bunch of different places online, bought a bunch of kind of dated old components and soldered them all in there. And lo and behold, it works. And it works better than it did to begin with. So the idea of taking this incredibly complicated thing and reverse engineering it, but producing it forward now and improving it, it's kind of, I don't know, it feels unique to the pinball industry to me, the idea that you can do that.

And I think it's pretty fun. And for me, it's been a great learning experience. We've only been restoring pinball machines for about four or five years now. And I've learned so much about electronics, about soldering, about everything else. And it's been a really fun journey. Yeah.

Yeah, the community itself, as you mentioned, Tim, just like the self-sustaining of the hobby within the community is one of the things that I love about it. I first started playing competitive pinball around like 2010, 2011. And I would go to these bigger tournaments like Pinberg, which is a big tournament that happened in Pittsburgh that is now back. And there's another big tournament called Indisc in Southern California that I just went to in late January in Riverside, California. And

You know, these tournaments have all games from like games that came out last year to games that came out in the 60s. Right. And when you've got hundreds of people playing games,

the same pinball machines in a small period of time, they're bound to break because Tim, as you mentioned, they're in their, a lot of them are mechanical. There's physical parts to it. You know, they, yes, they're, you know, the more modern machines have circuit boards and PCBs and, and modern CPUs and things like that and memory and Ram and V Ram. But they've also got, you know, solenoids and actuators and the flippers and rubber bands and everything can break. And there's this,

stunning community of people who have kept it alive by either sourcing and manufacturing parts that are expired because majority of these companies are gone. They don't exist anymore. They went out of business. And so a pipeline of parts, there are distributors like Marco and Pinball Life and other companies out there who are keeping the dream alive by making the parts. But then there are other people who are taking that opportunity to upgrade them and redo boards and

You know, so for example, there's a board called a Weebly board, which is basically the processing board that can replace in a 1970s or 1980s solid state pinball machine. You could pull out the old one if it dies and put this new one in, and it's got better connections. It's got, you know, more recent soldering. It's basically will extend the life of the pinball machine, which is just awesome to see. Yeah.

Are there fewer issues with pinball than there are with video games regarding intellectual property because there's just a lot of abandonware? What's the landscape like there? It's mixed. There's some stuff that is abandonware that nobody's really looking to – what's great about it is the majority of people are hobbyists and they're not looking truly to profit from it. There are some extended patents or copyrights that are –

while the company went out of business, someone bought them. So for example, all the classic late eighties, 1990s, Williams Valley games, which are some of the best games that ever came out. Tom, I'm sure, Tom, I'm sure you played one at some point in arcade, whether it's fun house or, or medieval madness or something like that. Someone, uh,

bought all those copyrights when Williams went out of business. And so if you wanted to, there are companies that are remaking the older games. For example, Chicago Gaming Company is redoing Cactus Canyon and Attack from Mars and Medieval Madness, some classics. Pedretti Pinball out of Italy has made a new round of Funhaus. They've all licensed the

artwork and the material and the schematics and things like that in order to do an official release. But the hobbyists that are out there also, if someone has an old machine and they're looking to, you know, they need to replace the soundboard, that stuff kind of happens, you know, I don't want to say in the gray market, but in the space of, you know, it's not commercially viable in that regard. Yeah.

One of the nice things is a lot of the most breakable components are kind of standardized. Even as you go back decades, a lot of the posts and the plastics and things like that, there are certainly a lot of specialized parts, but there's also a lot of stuff that is really shared across generations of machines as well. So if you break one of the little red posts on the pinball machine, it's probably the same post that was used 40, 50 years ago as well.

So those things are definitely not any kind of coverage, any kind of copyright or trademark or anything like that. Those are relatively easy to get. But yeah, it's really when you get into the circuit boards, the control wheels, and the individual artwork that things can get a little bit more complicated, especially the play fields, which is the wooden surface that the game actually happens on. When those start to wear out, there are ways of replacing them, but that's a huge job. And finding those can be challenging depending upon what kind of game you're talking about. Yeah.

And then when there's more specific, unique aspects. So, for example, I own a 1994 Data East Guns N' Roses pinball machine. And the person who I bought that from, I bought it used, obviously. The person I bought it from changed the gun that is used for the shooter lane. It was originally a six revolver, a six shooter revolver, kind of like the Guns N' Roses logo. Whoever owned it at some point in the past, I swapped it to a nine millimeter style gun. And so now...

You know, Tim, you're probably similar. I want to have it to be in its original form. No one is making that gun part anymore. And the only way I can replace it is to either find another Guns N' Roses machine that is so destroyed beyond its value that I can strip it for parts or find someone who's willing to part with theirs. Either way, I posted on Pinside, which is a very popular forum, as Tim mentioned. I posted, I'm like looking to buy a gun. And the first response was, LOL, good luck.

So while some stuff is replaceable and some stuff is reproducible, some stuff is lost to the ears. That's part of the joy of keeping these machines alive. My wife and I look for abused, beaten machines. Like you said, Ron, things are in really rough shape and try to bring them back to life. And it's a game of knowing how far is too far gone. There are certain components that if they're missing, it's fine. It's no big deal. There are other components that if they're missing, you're in a lot of trouble. Yeah.

Yeah, that's part of the joys of keeping these machines alive. And at least for me, part of it has been –

understanding how the older machines work and understanding how they work and how they're passing data. Because what we do at Scorbit is basically, you know, we're, you know, our mission is to, you know, connect pinball machines to the Internet. That's basically the one liner of what we do. And when you've got a machine from 1981, that's a solid state machine with where the Internet was just a, you know, a concept back then. Understanding how the machines work is the first step in order in order to do that.

What do you want to hear us talk about on this show? Like, I'm not saying you didn't like that or I didn't like the entire show, but you're like, hey, you know what? I'd also like to hear you talk about this thing. One way to let us know is our subreddit. You can submit stories and vote on them at reddit.com slash r slash Daily Tech News Show.

Everyone knows that it doesn't truly feel like Valentine's without the flowers. So whatever you do, don't forget the flowers. Beat the Valentine's rush and order early at 1-800-Flowers.com. Right now, when you order early from 1-800-Flowers, you can get up to 40% off gorgeous bouquets and one-of-a-kind arrangements that are guaranteed to wow. Don't put this off. Delivery dates are limited. So get up to 40% off today at 1-800-Flowers.com slash ACAST.

That's 1-800-Flowers.com slash ACAST. Why wait to see if you'll get something you like this Valentine's Day when you can go to BlueNile.com and find something you'll love? Whether you're looking to treat yourself to a little winter sparkle or show a galentine how much you appreciate them, Blue Nile offers a wide selection of high-quality designs, expert guidance, and free 30-day returns for the ultimate peace of mind.

You can even design your own jewelry. Right now, save up to 50% at BlueNile.com. That's BlueNile.com. We end every episode of DTNS with some shared wisdom. Today, John is helping us understand. Yes. Thank you, John. John writes, regarding the discussion about manufacturers combining forces to maneuver around geopolitical nonsense, you briefly mentioned the Honda and GM partnership. That was on the show yesterday where we talked to Bodie Grimm.

John writes,

John says, I strongly suspect, yes, sincerely, a lifelong GM customer who won't buy anything without CarPlay. Is Mary Barra a DTNS listener? Thank you, John, in Billings, Montana, for that. And yes, Mary, if you're listening, please let us know. Feedback at DailyTechNewsShow.com.

Yeah. Thank you. Thank you, John. Thank you, Ron Richards. Thank you, Tim Stevens, for all of you contributing to today's show. And thank you for being along for Daily Tech News Show. The show is made possible by our patrons at patreon.com slash DTNS. DTNS has a live version called DTNS Live. You can find that on YouTube and Twitch. And you can find details on all that and so much more at dailytechnewsshow.com. We will talk to you tomorrow. The DTNS family of podcasts.

Helping each other understand. Diamond Club hopes you have enjoyed this program. Brilliant. Brilliant. Yeah, right in time. Beautiful. Oh, oh, I got to do that. Oh, yeah, you got to get used to that. Somebody does.

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