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> Elon's offer to purchase the OpenAI nonprofit for $97.4billion isn't going to happen, but it may seriously complicate OpenAI's efforts to claim the nonprofit

> Elon's offer to purchase the OpenAI nonprofit for $97.4billion isn't going to happen, but it may seriously complicate OpenAI's efforts to claim the nonprofit is fairly valued at $40billion. If you won't sell it for $97.4billion, that means you think it's worth more than that. https://x.com/KelseyTuoc/status/1889064215710941594 https://x.com/KelseyTuoc/status/1889064215710941594

dmonitor 2y ago
That's a bad analysis. There's clearly non-market forces at play for why Sam Altman doesn't want to give control to a group associated with Elon.
- bpodgursky 2y ago
  Kelsey Piper is a very serious tech journalist who has written extensively about the OpenAI for-profit transition and the corporate structures involved [1]. You can present an argument about why it's a "bad analysis" but your offhand "analysis" is not constructive or well-informed here. [1] https://www.vox.com/future-perfect/380117/openai-microsoft-sam-altman-nonprofit-for-profit-foundation-artificial-intelligence https://www.vox.com/future-perfect/380117/openai-microsoft-s...
  - dmonitor 2y ago
    You're right. I was too quick and jumped the gun by calling it "bad analysis". However, I do believe that the source of this offer is the larger factor than the dollar amount in OpenAI's valuation of the offer. If this was anyone else offering to buyout OpenAI then the argument makes sense, but Sam Altman and Elon Musk seem to hate each other's guts and are even resorting to name-calling online in the fallout of this offer. https://xcancel.com/elonmusk/status/1889062013109703009 https://xcancel.com/elonmusk/status/1889062013109703009 There's a good chance there's more to it than I realize, though.
- gsibble 2y ago
  You can't take into account something like that when considering fiduciary duty.
  - hug 2y ago
    This statement is one of the things that really boils my piss about almost all online discussions where valuations are mentioned: Fiduciary duty does not mean that you must simply maximise share price, and never has. Fiduciary duty is specifically a moral imperative to do what is best for shareholders. Very often that is a large share valuation! Sometimes, though, you work for a non-profit (who told their shareholders "we're not actually trying to make you any money, consider your buy in a donation, and your profit to be not being eaten alive by killer robots after AI gains sentience") your fiduciary duty to your shareholders is to continue to not allow an unhinged billionaire who doesn't appear to give two small fucks about any kind of safety to buy your company.
    - kweingar 2y ago
      OAI's fiduciary duty is to their charitable mission. If selling to Elon for $97b jeopardizes the mission, then so would selling to preferred investors for $40b (as they would in turn face immense pressure by shareholders to realize an instant $57b gain by reselling to Musk!) That's what this whole thing is about. Musk's offer will probably not be accepted, and he knows it. The purpose is to throw a wrench in OAI's plan to sell to insiders at a heavy discount, possibly making it impossible for the nonprofit to become a for-profit. If this offer forces the preferred investments to cough up an extra $60b for the nonprofit, that's fantastic for the nonprofit mission.
      - gsibble 2y ago
        Exactly. Well said.
  - BeetleB 2y ago
    It's a private entity. The duty is to investors, and they're welcome to file a lawsuit if they disagree - all depends on the agreement(s) they made. Not accepting external offers to purchase startups is fairly normal. And "we don't like the new overlords" is also a fairly normal reason for refusing said offers.
- itsoktocry 2y ago
  Well, they'll end up having to convince a judge that that those "non-market forces" are worth $50 billion+. Good luck!
  - m3kw9 2y ago
    Yeah easily by saying we’ll make 10x that in a few years.
    - mindwok 2y ago
      You’re basically proving the point. If they’re confident they’re going to 10x their valuation in a few years, then the valuation probably doesn’t accurately reflect the value of the enterprise.
senordevnyc 2y ago
Didn't they already raise at a $157 billion valuation?
tyre 2y ago
Given musk’s history (“funding secured” to take Tesla private; trying to back out of buying twitter), OpenAI can make a reasonable case that he’s full of shit and it’s not a real offer.
- bpodgursky 2y ago
  He tried to claw back Twitter because tech stocks tanked, but he did have the funding to make the purchase (obviously). I don't think this is a good example. Besides, this is a real consortium, not a oneoff Tweet.
  - tyre 2y ago
    Considering an offer in relation to a valuation includes how likely the deal is to go through. That Elon has tried to pull out of a major purchase in bad faith definitely factors in. That doesn’t make the offer worth $0, but it’s not $97.4bn
m3kw9 2y ago
Maybe they want it for 5x, 2x is absolutely low ball for most businesses that isn’t making a loss. I would think sam is valuing that as low as possible

dmonitor 2y ago

That's a bad analysis. There's clearly non-market forces at play for why Sam Altman doesn't want to give control to a group associated with Elon.

bpodgursky 2y ago
Kelsey Piper is a very serious tech journalist who has written extensively about the OpenAI for-profit transition and the corporate structures involved [1]. You can present an argument about why it's a "bad analysis" but your offhand "analysis" is not constructive or well-informed here. [1] https://www.vox.com/future-perfect/380117/openai-microsoft-sam-altman-nonprofit-for-profit-foundation-artificial-intelligence https://www.vox.com/future-perfect/380117/openai-microsoft-s...
- dmonitor 2y ago
  You're right. I was too quick and jumped the gun by calling it "bad analysis". However, I do believe that the source of this offer is the larger factor than the dollar amount in OpenAI's valuation of the offer. If this was anyone else offering to buyout OpenAI then the argument makes sense, but Sam Altman and Elon Musk seem to hate each other's guts and are even resorting to name-calling online in the fallout of this offer. https://xcancel.com/elonmusk/status/1889062013109703009 https://xcancel.com/elonmusk/status/1889062013109703009 There's a good chance there's more to it than I realize, though.
gsibble 2y ago
You can't take into account something like that when considering fiduciary duty.
- hug 2y ago
  This statement is one of the things that really boils my piss about almost all online discussions where valuations are mentioned: Fiduciary duty does not mean that you must simply maximise share price, and never has. Fiduciary duty is specifically a moral imperative to do what is best for shareholders. Very often that is a large share valuation! Sometimes, though, you work for a non-profit (who told their shareholders "we're not actually trying to make you any money, consider your buy in a donation, and your profit to be not being eaten alive by killer robots after AI gains sentience") your fiduciary duty to your shareholders is to continue to not allow an unhinged billionaire who doesn't appear to give two small fucks about any kind of safety to buy your company.
  - kweingar 2y ago
    OAI's fiduciary duty is to their charitable mission. If selling to Elon for $97b jeopardizes the mission, then so would selling to preferred investors for $40b (as they would in turn face immense pressure by shareholders to realize an instant $57b gain by reselling to Musk!) That's what this whole thing is about. Musk's offer will probably not be accepted, and he knows it. The purpose is to throw a wrench in OAI's plan to sell to insiders at a heavy discount, possibly making it impossible for the nonprofit to become a for-profit. If this offer forces the preferred investments to cough up an extra $60b for the nonprofit, that's fantastic for the nonprofit mission.
    - gsibble 2y ago
      Exactly. Well said.
- BeetleB 2y ago
  It's a private entity. The duty is to investors, and they're welcome to file a lawsuit if they disagree - all depends on the agreement(s) they made. Not accepting external offers to purchase startups is fairly normal. And "we don't like the new overlords" is also a fairly normal reason for refusing said offers.
itsoktocry 2y ago
Well, they'll end up having to convince a judge that that those "non-market forces" are worth $50 billion+. Good luck!
- m3kw9 2y ago
  Yeah easily by saying we’ll make 10x that in a few years.
  - mindwok 2y ago
    You’re basically proving the point. If they’re confident they’re going to 10x their valuation in a few years, then the valuation probably doesn’t accurately reflect the value of the enterprise.

senordevnyc 2y ago

Didn't they already raise at a $157 billion valuation?

tyre 2y ago

Given musk’s history (“funding secured” to take Tesla private; trying to back out of buying twitter), OpenAI can make a reasonable case that he’s full of shit and it’s not a real offer.

bpodgursky 2y ago
He tried to claw back Twitter because tech stocks tanked, but he did have the funding to make the purchase (obviously). I don't think this is a good example. Besides, this is a real consortium, not a oneoff Tweet.
- tyre 2y ago
  Considering an offer in relation to a valuation includes how likely the deal is to go through. That Elon has tried to pull out of a major purchase in bad faith definitely factors in. That doesn’t make the offer worth $0, but it’s not $97.4bn

m3kw9 2y ago

Maybe they want it for 5x, 2x is absolutely low ball for most businesses that isn’t making a loss. I would think sam is valuing that as low as possible