To be clear (and as far as I understand), it’s not a hostile takeover bid because it cannot be: OpenAI is not a public company and thus doesn’t have a fiduciary duty to thousands to millions of shareholders but instead to a handful of big investors who can decide for themselves whether they want that Elon’s money or not. So this isn’t similar to what Twitter had been through but more like Elon teasing Altman I believe.
OpenAI is not a public company and thus doesn’t have a fiduciary duty
Public companies only have fiduciary duty to their sharehoders to the extent that their corporate charters say that they do. It’s entirely possible to launch a corporation that promises nothing to its shareholders, though it might be difficult to find investors.
The distinction you’re making is valid but misses the forest for the trees. Whether OpenAI is public or not, Musk’s bid is a textbook power play, not a genuine offer. The lack of fiduciary duty doesn’t erase the intent—it amplifies it. This isn’t about shareholder obligations; it’s about Musk leveraging his wealth to reshape AI governance in his image.
Comparing this to Altman’s jab at Twitter isn’t apples-to-apples. Altman’s point was rhetorical, highlighting Musk’s track record of overpromising and underdelivering. The “open-source” crusade Musk touts is hollow when xAI remains proprietary.
This isn’t about legality or structure—it’s about influence and control. Dressing it up as altruism insults anyone paying attention.
I read this on Hacker News, which I found particularly interesting:
Elon Musk’s bid for OpenAI isn’t about buying it but about disrupting its transition to a for-profit company. OpenAI Inc., the nonprofit, controls OpenAI LP, the capped-profit subsidiary. To convert to a full for-profit entity, OpenAI Inc. must sell its technology and IP to the new company, with regulators determining a fair valuation.
The rumored SoftBank investment at a $260B valuation relies on this transition, but the current estimated valuation is around $150B. Typically, control premiums in such deals range from 20-30%, putting the expected nonprofit payout at $30B-$40B. However, Musk’s $97B bid for OpenAI Inc.’s assets sets a significantly higher valuation, giving regulators a strong argument that the nonprofit should receive much more.
If regulators adopt Musk’s benchmark, OpenAI Inc. would end up with a 62% majority stake, making the transition far more complex or even blocking it entirely. Even though OpenAI won’t accept Musk’s offer, the bid’s primary effect is to make the legal and financial process of going for-profit much more difficult. It’s a strategic move designed to frustrate OpenAI’s leadership, particularly Sam Altman, and potentially derail the entire transition.
To be clear (and as far as I understand), it’s not a hostile takeover bid because it cannot be: OpenAI is not a public company and thus doesn’t have a fiduciary duty to thousands to millions of shareholders but instead to a handful of big investors who can decide for themselves whether they want that Elon’s money or not. So this isn’t similar to what Twitter had been through but more like Elon teasing Altman I believe.
Public companies only have fiduciary duty to their sharehoders to the extent that their corporate charters say that they do. It’s entirely possible to launch a corporation that promises nothing to its shareholders, though it might be difficult to find investors.
The distinction you’re making is valid but misses the forest for the trees. Whether OpenAI is public or not, Musk’s bid is a textbook power play, not a genuine offer. The lack of fiduciary duty doesn’t erase the intent—it amplifies it. This isn’t about shareholder obligations; it’s about Musk leveraging his wealth to reshape AI governance in his image.
Comparing this to Altman’s jab at Twitter isn’t apples-to-apples. Altman’s point was rhetorical, highlighting Musk’s track record of overpromising and underdelivering. The “open-source” crusade Musk touts is hollow when xAI remains proprietary.
This isn’t about legality or structure—it’s about influence and control. Dressing it up as altruism insults anyone paying attention.
I read this on Hacker News, which I found particularly interesting: