Elon Musk has seen two companies in which he played a big role…Twitter and OpenAI—head in two very different directions.
Twitter, which it bought for $44 billion at the end of October, has since suffered a sharp decline in value. information reported yesterday that Musk now values the company, which he took private, at around $20 billion. It’s based on an email he allegedly sent to employees Friday night. offering them equity grants (possibly to stem a talent drain) that they can resell in future liquidity events. The valuation is not far from that made by Fidelity Investments, which Axios reported on earlier this month.
Twitter has lost advertisers following changes to its content moderation policies under Musk, who describes himself as a “free speech absolutist”. The company relies heavily on advertising, although Musk has tried to increase subscription revenue. He has cut around 75% of the company’s staff since taking office.
As for OpenAI, creator of the AI chatbots ChatGPT and GPT-4, Musk co-founded it and helped start in 2015 with a donation of approximately $100 million. He has long warned of the threat artificial intelligence potentially poses to humanity. OpenAI was launched as a non-profit organization focused on the safe and transparent development of AI
Musk parted ways with OpenAI in 2018, likely because Tesla’s own AI work created conflict, although according to a Semafor report released on Friday, it’s actually because Musk offered to lead OpenAI and was turned down by CEO Sam Altman and other founders.
Whatever Musk’s reasons, OpenAI quickly underwent significant changes. In 2019, it transitioned from a not-for-profit model to a “capped profit” model and received the first of several major investments from Microsoftwhich helped him with the vast computing resources needed for AI tools like ChatGPT.
The valuation of OpenAI has increased significantly. Earlier this year, the company was in discussions to sell existing shares in a tender offer that would value it at around $29 billion, up from around $14 billion in 2021, according THE the wall street journal.
The musk has expressed his frustration on OpenAI’s trajectory, noting its donation and the company’s current valuation. On March 15, he tweeted“I still don’t understand how a nonprofit that I donated about $100 million to somehow became a $30 billion for-profit corporation. If it’s legal, why doesn’t everyone do it?
A month earlier he tweeted: “OpenAI was created as an open source (that’s why I named it “Open” AI), non-profit company to act as a counterweight to Google, but now it’s become a closed-source, profit-making company effectively controlled by Microsoft. It’s not at all what I wanted.
Altman responded to Musk’s criticism on Thursday during the With Kara Swisher podcast, saying, “Most of this isn’t true, and I think Elon knows that. We are not controlled by Microsoft. Microsoft doesn’t even have a seat on the board, we’re an independent company.