4 ms·

A lot of people are unsurprisingly throwing shade on Musk being involved here but I think it's really important to understand what this is fundamentally about:

by _2d30 2y ago

A lot of people are unsurprisingly throwing shade on Musk being involved here but I think it's really important to understand what this is fundamentally about: stopping or fundamentally changing OpenAI's plans to be spun off. The issue at hand is that OpenAI (the private, currently "capped profit" entity, henceforth in this post referred to as OpenAI-P) is trying to get spun out of control of the OpenAI non-profit (henceforth referred to as OpenAI-NP). In order to do this, OpenAI-P must compensate OpenAI-NP for its ownership of OpenAI-P. Currently they are trying to value this at $40B. This is a swindling for numerous reasons. Firstly, OpenAI-NP has complete control over OpenAI-P. They OpenAI-NP board can do whatever it wants with OpenAI-P. OpenAI-P has some financial obligations to those who have purchased its PPU (its equity instrument) but ultimately OpenAI-NP controls OpenAI-P and could do whatever it wants with it (eg shut it down, fire Sam Altman on a whim, etc). Further, the cashflows that OpenAI-NP still has ownership of are, at least under the claims of people like Sam A, clearly worth dramatically more than the $40B valuation would imply. In addition, the OpenAI-NP mission is "Our mission is to ensure that artificial general intelligence—AI systems that are generally smarter than humans—benefits all of humanity". The control of the leading AI Lab is the only way that they can possibly live up to their mission. To abdicate control of OpenAI-P is to abdicate their mission. If the OpenAI-NP board follows their mission as they are obligated to, they cannot possibly be willing to abdicate this control and they must surely value it far beyond $40B. EDIT TO ADD TL;DR - Musk is trying to force OpenAI to value OpenAI-NP's stake in OpenAI-P at a reasonable level which is far greater than the current $40B which will help Musk by potentially derailing OpenAI-P's goal to be spun off.

Slow_Hand 2y ago
Could it be that part of the the Musk-led group's offer of $100 billion is a tactic to drive up the valuation of Open AI-P, so that it's more painful/difficult for Open AI-P to buy itself out of Open AI-NP?
- _2d30 2y ago
  That's why I said this: > this is fundamentally about: stopping or fundamentally changing OpenAI's plans to be spun off. If OpenAI actually values OpenAI-NP at $40B then they will surely sell it for $97B. The point is the $40B is obviously a dramatic undervaluing and the fact they won't sell it for $97B shows that. This is the wrench.
  - root_axis 2y ago
    Interesting logic, but I think it's obvious to everyone that the reason they won't sell to Elon has nothing to do with the price of the offer.
    - _2d30 2y ago
      I'm too smooth brained to see the obvious reason. Would love for someone with more folds to say what the reason is instead of hiding it behind its obviousness. OpenAI-NP can either have a $40B from spinning out OpenAI-P or $97B in cash. In theory, they could literally just go and buy back their stake in OpenAI-P and have $57B left over for other AI endeavors if the valuation of it at $40B were remotely reasonable! If I'm on the board and I believe the $40B number, I'd do this in a heatbeat.
      - root_axis 2y ago
        Which number is bigger isn't the only calculation to make. Elon has shown himself to be a capricious and distracted steward of the companies he assumes control of. He has a lot of debt and is already over-leveraged on multiple companies as well as his new roles in government. X has plunged in value, Tesla sales are plummeting worldwide, Elon's scorched earth political agenda invites unending controversy that OpenAI already has enough of on its own. Even if you ignore those glaring concerns, there's a compelling argument to be made that OpenAI's current leadership has already proven itself more than capable of world-class innovation and vision when they effectively created an entirely new industry. It wasn't long ago that the company almost fell apart because senior folks who actually care about the company tried to oust sama - the chaos that an Elon takeover would introduce is a critical risk that cannot be ignored. "I'll pay you double" isn't the instant checkmate you're suggesting.
        _2d30 2y ago
        For as "obvious to everyone" as your point is supposed to be, it focuses entirely on what the offer means to OpenAI-P and zero on what it means to OpenAI-NP. The decision is to be made by an OpenAI-NP that can effectively divorce itself from OpenAI-P and in either case will be divorced from control of OpenAI-P. They can either have $40B in OpenAI equity or $97B. In the scenario where they chose the $40B in OpenAI equity, they are eschewing $97B with which they can achieve their mission. They will be less effective by $57B. They still have no control over OpenAI in this context. They don't have control over OpenAI from the perspective of safety/benefit of humanity. All they have is $40B worth of equity. Or, they can get $97B and go about completing their mission. In this case, what happens to OpenAI doesn't really matter. They lose control over OpenAI from the perspective of safety/public benefit in both cases, but in this case they get to deploy $97B of capital to their goals. The success of OpenAI-P is irrelevant to OpenAI-NP. Now, maybe you would claim that there is some kind of existential risk from OpenAI-P being controlled by Elon. But if that's the case, how is Elon uniquely special? How does OpenAI prevent Elon from gaining control of OpenAI anyway when they won't have control to prevent it? How can they be sure Sam Altman is okay to lead when the board already removed him due his duplicity once. To eliminate their control OpenAI-P, they open themselves up to this same risk regardless. They can take that risk with either $40B of equity or $97B of cash. > "I'll pay you double" isn't the instant checkmate you're suggesting. This isn't what I suggest at all and I would've expected someone who sees through such complex issues to rationales that are "obvious to everyone" would've been able to see that. This does however pose real problems for OpenAI-P as they try to go private!
- aeternum 2y ago
  Drive up or value it fairly? If Sam and the board are unwilling to even consider the $100B offer then it seems to be strong evidence that it is worth much more than $100B.
beAbU 2y ago
I do not, for a single second, believe that Musk is doing this for altruistic reasons.
- amazingamazing 2y ago
  it doesn't have to be luckily
- _2d30 2y ago
  I never said this was altruistic. The same goal can come from him trying to derail OpenAI-P.
  - deleted 2y ago
    [deleted]
- chrisco255 2y ago
  Nobody is doing anything for altruistic reasons, including and especially Sam Altman.
  - croes 2y ago
    Yeah sure, in the pandemic all people just did it for the money. Same with all the voluntary fire fighters and all the other voluntary work.
    - chrisco255 2y ago
      A lot of people did a lot of things for a lot of money during the pandemic. Even voluntary fire fighters do it for status, fun, companionship, extra money, experience, etc. Doesn't mean that volunteers aren't valued or important. It's important to note that there's limits to people's charity even among the most charitable. Those limits are driven by perceived costs outweighing the perceived benefits to the individual.
anotherhue 2y ago
This is a well known unsolved problem in theoretical investment science.
danparsonson 2y ago
I probably misunderstand you but why should it be fundamentally about that and not fundamentally about controlling more valuable technology? The example of Twitter clearly demonstrates that despite the Dear Leader's altruistic claims, he's after money and power just the same as anyone else.
- bcrosby95 2y ago
  I think some of it is just a grudge. From everything I've read about Musk he seems big on them. So while some of it may be for power, a large portion is probably plain old revenge.
- _2d30 2y ago
  He would probably also be happy to get OpenAI-NP for $97B! However, I don't think he believes this is likely at all. His goal is to force OpenAI's hand and stop the comical; undervaluing of OpenAI-NP by forcing OpenAI to value OpenAI-NP at >$97B. I probably haven't explained this clearly enough in my original post which I wrote too quickly.
smrtinsert 2y ago
Nonsense. He's ignoring judges orders to cease and desist in his funding freezes and he's simultaneously attempting to seize control of the AI company through an aggressive acquitision, all the while avoid seemingly all oversight. This can only be described as techno authoritarianism.
- _2d30 2y ago
  > and he's simultaneously attempting to seize control of the AI company through an aggressive acquitision Kind of, yes! If OpenAI actually believes that the true value of OpenAI-NP is $40B then surely they will sell it for $97B! But, they of course don't believe that the proper valuation of complete control over OpenAI-P is worth only $40B. That's the point of why this works.
- smrtinsert 2y ago
  you can add data, transportation and transhumanism to the list of things he'd love to do. You go work at his company, living in his government, in his vehicle, using his data network, thinking thoughts through his mind link. He's laid it out bare, quite honestly.
amazingamazing 2y ago
I thought about this for a bit and I'm not sure how you would even counter. A legitimate offer has been tendered. It's pretty much checkmate here. A certainly well played move. This will definitely derail things. For OpenAI to best move would be to actually unconditionally accept, as it's likely this offer isn't serious in the sense that it's the offer they'd prefer to give.
kLADh232Ha 2y ago
I think Musk (probably using his Saudi admirers yet again) wants to buy OpenAI because he needs a working chatbot right now. For example, he is gutting the General Services Administration and wants to install a GSAi chatbot to replace the workers: https://www.wired.com/story/doge-chatbot-ai-first-agenda/ https://www.wired.com/story/doge-chatbot-ai-first-agenda/ Perhaps "big balls" and the other geniuses he hired haven't managed to come up with a working solution. Musk needs chatbots for his technocracy movement because they are great for faking progress in efficiency without understanding any of the systems they replace and destroy. He may also need them for online bot campaigns to convince MAGA voters that layoffs, deregulation, H1Bs and supporting billionaires are really in their best interest. That said, considering he overpaid for Twitter, perhaps OpenAI should consider his offer.
- oskarkk 2y ago
  > I think Musk (probably using his Saudi admirers yet again) wants to buy OpenAI because he needs a working chatbot right now. But I think Musk does have a working chatbot right now? Haven't used it so I won't speak from experience, but Grok by xAI is working and is not that much behind OpenAI, maybe like half a year behind, judging by LLM Arena[0] and other benchmarks that I've seen. [0] https://lmarena.ai https://lmarena.ai
- easton 2y ago
  Putting aside that LLMs can’t replace people that way, it would be infinitely cheaper to just license one vs buying OpenAI. And you could say “but Elon wants government money”, but it’d take so long to make it back because inference is so cheap (and probably running at a loss if you’re OpenAI).
- esafak 2y ago
  This makes no sense. Republicans work for the government too. How are they going to get re-elected if they fire their base?
textlapse 2y ago
OpenAI gonna prove P=NP is what you are alluding to?
gexla 2y ago
Great thread, thanks. This is kind of what I was thinking and makes the most sense. That this is a play to block OpenAI plans to go full for-profit.
thinkling 2y ago
Reportedly [0], SoftBank is looking to invest $40B for a share of OpenAI.com that would value it at $260B. Given that OpenAI.org currently wholly owns OpenAI.com (doesn't it? even Msft didn't get a stake?), I have trouble seeing (a) how the $40B valuation would stand up in court if anyone could challenge it (and I believe Musk is trying to do that?), but also (b) how Musk's $100B pushes up the valuation more than a SoftBank investment would do. Scratching my head... [0] https://www.nbcwashington.com/news/business/money-report/softbank-set-to-invest-40-billion-in-openai-at-260-billion-valuation-sources-say/3838834/ https://www.nbcwashington.com/news/business/money-report/sof...

by _2d30 2y ago

Slow_Hand 2y ago

Could it be that part of the the Musk-led group's offer of $100 billion is a tactic to drive up the valuation of Open AI-P, so that it's more painful/difficult for Open AI-P to buy itself out of Open AI-NP?

_2d30 2y ago
That's why I said this: > this is fundamentally about: stopping or fundamentally changing OpenAI's plans to be spun off. If OpenAI actually values OpenAI-NP at $40B then they will surely sell it for $97B. The point is the $40B is obviously a dramatic undervaluing and the fact they won't sell it for $97B shows that. This is the wrench.
- root_axis 2y ago
  Interesting logic, but I think it's obvious to everyone that the reason they won't sell to Elon has nothing to do with the price of the offer.
  - _2d30 2y ago
    I'm too smooth brained to see the obvious reason. Would love for someone with more folds to say what the reason is instead of hiding it behind its obviousness. OpenAI-NP can either have a $40B from spinning out OpenAI-P or $97B in cash. In theory, they could literally just go and buy back their stake in OpenAI-P and have $57B left over for other AI endeavors if the valuation of it at $40B were remotely reasonable! If I'm on the board and I believe the $40B number, I'd do this in a heatbeat.
    - root_axis 2y ago
      Which number is bigger isn't the only calculation to make. Elon has shown himself to be a capricious and distracted steward of the companies he assumes control of. He has a lot of debt and is already over-leveraged on multiple companies as well as his new roles in government. X has plunged in value, Tesla sales are plummeting worldwide, Elon's scorched earth political agenda invites unending controversy that OpenAI already has enough of on its own. Even if you ignore those glaring concerns, there's a compelling argument to be made that OpenAI's current leadership has already proven itself more than capable of world-class innovation and vision when they effectively created an entirely new industry. It wasn't long ago that the company almost fell apart because senior folks who actually care about the company tried to oust sama - the chaos that an Elon takeover would introduce is a critical risk that cannot be ignored. "I'll pay you double" isn't the instant checkmate you're suggesting.
      - _2d30 2y ago
        For as "obvious to everyone" as your point is supposed to be, it focuses entirely on what the offer means to OpenAI-P and zero on what it means to OpenAI-NP. The decision is to be made by an OpenAI-NP that can effectively divorce itself from OpenAI-P and in either case will be divorced from control of OpenAI-P. They can either have $40B in OpenAI equity or $97B. In the scenario where they chose the $40B in OpenAI equity, they are eschewing $97B with which they can achieve their mission. They will be less effective by $57B. They still have no control over OpenAI in this context. They don't have control over OpenAI from the perspective of safety/benefit of humanity. All they have is $40B worth of equity. Or, they can get $97B and go about completing their mission. In this case, what happens to OpenAI doesn't really matter. They lose control over OpenAI from the perspective of safety/public benefit in both cases, but in this case they get to deploy $97B of capital to their goals. The success of OpenAI-P is irrelevant to OpenAI-NP. Now, maybe you would claim that there is some kind of existential risk from OpenAI-P being controlled by Elon. But if that's the case, how is Elon uniquely special? How does OpenAI prevent Elon from gaining control of OpenAI anyway when they won't have control to prevent it? How can they be sure Sam Altman is okay to lead when the board already removed him due his duplicity once. To eliminate their control OpenAI-P, they open themselves up to this same risk regardless. They can take that risk with either $40B of equity or $97B of cash. > "I'll pay you double" isn't the instant checkmate you're suggesting. This isn't what I suggest at all and I would've expected someone who sees through such complex issues to rationales that are "obvious to everyone" would've been able to see that. This does however pose real problems for OpenAI-P as they try to go private!
aeternum 2y ago
Drive up or value it fairly? If Sam and the board are unwilling to even consider the $100B offer then it seems to be strong evidence that it is worth much more than $100B.

beAbU 2y ago

I do not, for a single second, believe that Musk is doing this for altruistic reasons.

amazingamazing 2y ago
it doesn't have to be luckily
_2d30 2y ago
I never said this was altruistic. The same goal can come from him trying to derail OpenAI-P.
- deleted 2y ago
  [deleted]
chrisco255 2y ago
Nobody is doing anything for altruistic reasons, including and especially Sam Altman.
- croes 2y ago
  Yeah sure, in the pandemic all people just did it for the money. Same with all the voluntary fire fighters and all the other voluntary work.
  - chrisco255 2y ago
    A lot of people did a lot of things for a lot of money during the pandemic. Even voluntary fire fighters do it for status, fun, companionship, extra money, experience, etc. Doesn't mean that volunteers aren't valued or important. It's important to note that there's limits to people's charity even among the most charitable. Those limits are driven by perceived costs outweighing the perceived benefits to the individual.

anotherhue 2y ago

This is a well known unsolved problem in theoretical investment science.

danparsonson 2y ago

I probably misunderstand you but why should it be fundamentally about that and not fundamentally about controlling more valuable technology? The example of Twitter clearly demonstrates that despite the Dear Leader's altruistic claims, he's after money and power just the same as anyone else.

bcrosby95 2y ago
I think some of it is just a grudge. From everything I've read about Musk he seems big on them. So while some of it may be for power, a large portion is probably plain old revenge.
_2d30 2y ago
He would probably also be happy to get OpenAI-NP for $97B! However, I don't think he believes this is likely at all. His goal is to force OpenAI's hand and stop the comical; undervaluing of OpenAI-NP by forcing OpenAI to value OpenAI-NP at >$97B. I probably haven't explained this clearly enough in my original post which I wrote too quickly.

smrtinsert 2y ago

Nonsense. He's ignoring judges orders to cease and desist in his funding freezes and he's simultaneously attempting to seize control of the AI company through an aggressive acquitision, all the while avoid seemingly all oversight. This can only be described as techno authoritarianism.

_2d30 2y ago
> and he's simultaneously attempting to seize control of the AI company through an aggressive acquitision Kind of, yes! If OpenAI actually believes that the true value of OpenAI-NP is $40B then surely they will sell it for $97B! But, they of course don't believe that the proper valuation of complete control over OpenAI-P is worth only $40B. That's the point of why this works.
smrtinsert 2y ago
you can add data, transportation and transhumanism to the list of things he'd love to do. You go work at his company, living in his government, in his vehicle, using his data network, thinking thoughts through his mind link. He's laid it out bare, quite honestly.

amazingamazing 2y ago

I thought about this for a bit and I'm not sure how you would even counter. A legitimate offer has been tendered. It's pretty much checkmate here. A certainly well played move. This will definitely derail things. For OpenAI to best move would be to actually unconditionally accept, as it's likely this offer isn't serious in the sense that it's the offer they'd prefer to give.

kLADh232Ha 2y ago

I think Musk (probably using his Saudi admirers yet again) wants to buy OpenAI because he needs a working chatbot right now. For example, he is gutting the General Services Administration and wants to install a GSAi chatbot to replace the workers: https://www.wired.com/story/doge-chatbot-ai-first-agenda/ https://www.wired.com/story/doge-chatbot-ai-first-agenda/ Perhaps "big balls" and the other geniuses he hired haven't managed to come up with a working solution. Musk needs chatbots for his technocracy movement because they are great for faking progress in efficiency without understanding any of the systems they replace and destroy. He may also need them for online bot campaigns to convince MAGA voters that layoffs, deregulation, H1Bs and supporting billionaires are really in their best interest. That said, considering he overpaid for Twitter, perhaps OpenAI should consider his offer.

oskarkk 2y ago
> I think Musk (probably using his Saudi admirers yet again) wants to buy OpenAI because he needs a working chatbot right now. But I think Musk does have a working chatbot right now? Haven't used it so I won't speak from experience, but Grok by xAI is working and is not that much behind OpenAI, maybe like half a year behind, judging by LLM Arena[0] and other benchmarks that I've seen. [0] https://lmarena.ai https://lmarena.ai
easton 2y ago
Putting aside that LLMs can’t replace people that way, it would be infinitely cheaper to just license one vs buying OpenAI. And you could say “but Elon wants government money”, but it’d take so long to make it back because inference is so cheap (and probably running at a loss if you’re OpenAI).
esafak 2y ago
This makes no sense. Republicans work for the government too. How are they going to get re-elected if they fire their base?

textlapse 2y ago

OpenAI gonna prove P=NP is what you are alluding to?

gexla 2y ago

Great thread, thanks. This is kind of what I was thinking and makes the most sense. That this is a play to block OpenAI plans to go full for-profit.

thinkling 2y ago

Reportedly [0], SoftBank is looking to invest $40B for a share of OpenAI.com that would value it at $260B. Given that OpenAI.org currently wholly owns OpenAI.com (doesn't it? even Msft didn't get a stake?), I have trouble seeing (a) how the $40B valuation would stand up in court if anyone could challenge it (and I believe Musk is trying to do that?), but also (b) how Musk's $100B pushes up the valuation more than a SoftBank investment would do. Scratching my head... [0] https://www.nbcwashington.com/news/business/money-report/softbank-set-to-invest-40-billion-in-openai-at-260-billion-valuation-sources-say/3838834/ https://www.nbcwashington.com/news/business/money-report/sof...