Elon Musk has seen two companies he’s played a big role in—Twitter and OpenAI—head in two very different directions.
Twitter, which he bought for $44 billion in late October, has since suffered a steep drop in value. The Information reported yesterday that Musk now values the company, which he took private, at about $20 billion. That’s based on an email he reportedly sent to employees late Friday offering them equity grants (possibly to stem an exodus of talent) that they’ll be able to sell during future liquidity events. The assessment isn’t far from one 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’s described himself as a “free-speech absolutist.” The company relies heavily on advertising, though Musk has been trying boost subscription revenue. He’s slashed about 75% of the company’s staff since taking over.
As for OpenAI—maker of A.I. chatbots ChatGPT and GPT-4—Musk cofounded it and helped get it started in 2015 with a donation of about $100 million. He has longed warned about the threat artificial intelligence potentially poses to humanity. OpenAI was started as a nonprofit focused on the safe and transparent development of A.I.
Musk parted ways with OpenAI in 2018, presumably because Tesla’s own A.I. work created a conflict—though according to a Semafor report published on Friday, it was actually because Musk offered to run OpenAI and was rejected by CEO Sam Altman and other founders.
Whatever Musk’s reasons, OpenAI soon underwent significant changes. In 2019, it switched from a nonprofit to a “capped-profit” model and received the first of several large investments from Microsoft, which helped it with the vast computing resources needed for A.I. tools like ChatGPT.
OpenAI’s valuation has shot up dramatically. Earlier this year, the company was in discussions to sell existing shares in a tender offer that would value it at about $29 billion, up from about $14 billion in 2021, according to the Wall Street Journal.
Musk has expressed frustration over OpenAI’s trajectory, noting his donation and the company’s current valuation. On March 15, he tweeted: “I’m still confused as to how a non-profit to which I donated ~$100M somehow became a $30B market cap for-profit. If this is legal, why doesn’t everyone do it?”
A month earlier, he tweeted: “OpenAI was created as an open source (which is why I named it “Open” AI), non-profit company to serve as a counterweight to Google, but now it has become a closed source, maximum-profit company effectively controlled by Microsoft. Not what I intended at all.”
Altman responded to Musk’s criticism on Thursday during the On With Kara Swisher podcast, saying, “Most of that is not true, and I think Elon knows that. We’re not controlled by Microsoft. Microsoft doesn’t even have a board seat on us; we are an independent company.”