There’s something else in the works with Musk’s bid. On the face of it, he’s risking about 20% of his net capital on this bid. OpenAI is a private company that is not listed, so any purchase has to be negotiated.
Sam Altman derisively made a counteroffer for “Twitter” — not even bothering to call it “X.”
Any negotiations are likely to be lengthy, hostile, and probably unproductive. It’s more likely the bid will simply be refused. Musk must be aware of this. The question is what is the point of the bid?
OpenAI valuations are all over the place. There’s talk of the company raising more capital up to $300 billion. What is OpenAI actually worth, in terms of assets?
The core assets are pretty solid even in theory:
Intellectual property.
Research.
Market presence and reach.
That’s nothing like the whole story. Artificial intelligence is turning into an ongoing saga of “turbocharged technological turnover.” New IP and AI tech is popping up all the time. It’s devaluing old tech at the same rate.
These assets have short shelf lives of days, in some cases. Witness Berkeley inventing a mini-DeepSeek at $30 a job. Self-evolving AI could blow that out of the water.
Now try putting a specific dollar value on this cyclotron of mixed asset values.
The next generation of AI will be AGI, Artificial General Intelligence. This is likely to be the first iteration of high-end AI.
It looks like most players in the market are naturally positioning for a stake in the AI market before AGI arrives.
That makes perfect sense. Musk would be trying to position himself into the best market position possible.
The risks, however, are considerable and very real. Musk’s wealth is inextricably locked into market values for his own assets. A big market crash or correction could hit him very hard.
His market credibility is also on the line. Musk and Altman clashed over the Stargate Project. Musk was basically not in the game. Now he wants to buy OpenAI?
The question is whether his judgment is good business.
To be fair, it might be.
Owning an AI leader has to be worth something, surely. On the other hand, the fast moves in AI tech could easily erode OpenAI’s position.
The US took DeepSeek badly. A lot of money is at stake, and DeepSeek scared that money badly. Stargate, supposed to ensure US dominance in the AI field, hasn’t delivered anything yet.
If Musk were to buy OpenAI, more capital would need to be provided sooner or later. The actual financial commitment would be higher, perhaps much higher.
This bid could be a very dangerous move.
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Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
