Written by Cláudio Afonso | LinkedIn | X
Tesla shares rose over 6% to $356 early Thursday after Elon Musk’s attorneys said he would withdraw his bid if OpenAI halts its transition to a for-profit entity. Musk, the CEO of Tesla and xAI, is a key rival to OpenAI’s ChatGPT.
His attorneys said in a court filing late Wednesday that Musk will withdraw his bid if OpenAI’s board is “prepared to preserve the charity’s mission” and “take the ‘for sale’ sign off its assets” by halting its transition to a for-profit company.
“Altman literally testified to Congress that he wouldn’t get OpenAI compensation and now he wants $10 billion! What a liar,” Musk wrote on X in late January.
An Elon Musk-led group of investors offered $97.4 billion to control Open AI, but Altman rejected the offer a few minutes later, writing on X: “no thank you but we will buy twitter for $9.74 billion if you want.”
Oppenheimer’s analyst Colin Rusch released a new research note earlier this week saying that “Elon Musk’s bid for Open AI” is a “distraction from Tesla’s challenges”.
Elon Musk was an early investor and board member of Open AI. As the company prepared to transition from a non-profit to a for-profit corporation, Tesla’s CEO filed a lawsuit, pleading preliminary injunction in December 2024.
Regarding Musk’s pursuit of Open AI, Rusch commented that “we don’t expect any meaningful discussions to develop”, but noted that there are “increasing risks to Street estimates for Tesla as EV and AV competition intensifies.”
According to The Associated Press, Musk requested a court order to block ChatGPT’s company from going forward as a public benefit corporation (PBC), arguing that it would be against Open AI’s “founding aims as a non-profit research lab benefiting the public good”.
OpenAI’s CEO said Musk “likes to get into fights” in an open letter published by the company in December. According to Sam Altman, Elon Musk had proposed a “for-profit structure for OpenAI back in 2017 in his capacity as the co-founder of the non-profit”, having “walked away” after “he didn’t get majority equity and full control” in 2018.
At the time of writing, Tesla is trading 6.2% higher at $357. The stock reached its all time record in mid-December at $488.54.
Late last month, the company said that this year “will be a seminal year in Tesla’s history as FSD (supervised) continues to rapidly improve with the aim of ultimately exceeding human levels of safety.”
As reported earlier today, the U.S. Department of State — when it was still under the Biden Administration — had planned to award Tesla a $400 million contract for armored electric vehicles.
However, a new update on Wednesday to its procurement forecast has removed the carmaker’s name, replacing it with a more generic reference to “Armored Electric Vehicles.” On X, Musk wrote he’s “pretty sure” Tesla isn’t getting the contract which was planned for September 30.
