Elon never wanted to buy OpenAI.
Instead, this is what his $97.4 billion offer really meant:
🔹 OpenAI is transitioning from non-profit to for-profit.
To do so, a new for-profit entity needs to acquire OpenAI’s assets from the non-profit, ideally at the lowest possible price.
Since OpenAI is still burning billions, cash is a concern. And when you're a private company, you can value your assets however you like (kind of).
$1 inter-company transactions are not unheard of.
🔹 But Elon is messing with Sam's plans.
His formal $97.4B offer put a price tag on OpenAI’s assets.
Now, it’s much harder for Sam Altman to justify a low valuation for the transition.
Higher price means more cash to raise and slower progress.
🔹 Elon's team also committed to keeping OpenAI non-profit,
right when Sam is pivoting it to a for-profit entity.
Not only that, they will even withdraw the offer should OpenAI decided to stop the transition.
The message is clear: Elon is the "good guy", prioritising humanity over profits, unlike Altman.
🔹 Then, the killer move: due diligence.
The offer letter included a May 10th deadline and demanded access to OpenAI’s "assets, facilities, equipment, books, and records" as well as "particular personnel involved in the Business" for interviews.
Even if the deal didn't go through, meanwhile xAI would get invaluable insights into its competitor’s business and technology.
🔹Elon got exactly what he wanted.
Few days ago, OpenAI’s board formally rejected the offer.
But Elon still got what he wanted:
- Undermine Sam Altman's reputation.
- Regulatory scrutiny over the for-profit transition.
- Slowdown in OpenAI operations and plans.
Often dismissed as just erratic and crazy, Elon is actually playing a long and calculated game. Later today he will release the latest xAI models, supposed to be the best of all.
I wouldn't be surprised if Elon eventually won the AI race, same as he did with EVs and space.
Time will tell!