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As expected, the ongoing one-upmanship between Elon Musk and OpenAI's CEO, Sam Altman, has descended into a juvenile, name-calling brinkmanship, with the CEO of Tesla labeling his OpenAI counterpart a "swindler," and the latter responding by positing that Musk's bid for his company came from a "position of insecurity." Now, Oppenheimer has jumped into this melee with a much-needed rational take on these fast-paced developments.
To wit, Oppenheimer analyst Colin Rusch thinks that Elon Musk's $97.8 billion unsolicited bid for OpenAI via a consortium of investors is merely a distraction:
"While TSLA (Tesla) has shifted focus to being a Physical AI play, we view Elon Musk's bid for Open AI as a distraction from TSLA's challenges."
To bolster his argument, Rusch cites the fact that Elon Musk's bid for OpenAI is at a 38 percent discount to the firm's valuation established during its last major funding round in October 2024. Consequently, the Oppenheimer analyst sees no "meaningful discussions" around Musk's latest gambit, but does foresee "increasing risks to Street estimates for TSLA (Tesla) as EV and AV competition intensifies."
The analyst goes on to note:
"We also believe CEO Musk's political activity has fans in certain circles, but that his public life risks alienating consumers and employees as the Trump administration tests the limits of its power."
As evidence, Rusch points towards "negative trends in CA and EU registrations in 2024 continuing in January 2025 while China data suggests a soft start to the year at (11.5%)."
As we noted recently, Tesla's sales in the EU plunged 47.7 percent year-over-year in January 2025, materializing at just 5,517 units against a sales figure of 10,556 units that Tesla recorded in January 2024. Meanwhile, in the US, Tesla's sales momentum continues to be hampered by the pull-forward of demand in Q4'24 and the upcoming launch of Model Y Juniper.
Coming back, the animus between Sam Altman and Elon Musk came into the limelight when the former pledged to change OpenAI's corporate structure to a public benefit corporation (PBC), where its core AI-related functions will soon be controlled by a for-profit arm, while the non-profit arm will continue to retain an ownership interest in the for-profit entity.
In late 2024, Elon Musk filed a lawsuit against OpenAI for its planned transition to a PBC, going so far as to plead for a preliminary injunction in December 2024, arguing that the planned change was against OpenAI's ethos of working for the betterment of the entire human race.
Sam Altman then responded by labeling Elon Musk a "bully" who "likes to get into fights." According to an open letter that the company published on the 13th of December, 2024, Elon Musk had himself proposed a for-profit structure for OpenAI back in 2017 in his capacity as the co-founder of the non-profit. The letter went on to note:
"When he didn’t get majority equity and full control, he walked away [in 2018] and told us we would fail."
OpenAI CEO Sam Altman: "Musk’s life is probably coming from a position of insecurity. I feel for the guy. I don’t think he’s a happy person."
Altman also said @elonmusk likely doesn’t have heavy influence on policy or presidential decision-making. https://t.co/cZUVVtHW0E pic.twitter.com/FsAVxvNMjT
— Wall St Engine (@wallstengine) February 11, 2025
After yesterday's online altercation between Elon Musk and Sam Altman, where the latter rejected the former's buyout bid and made a counter-offer to buy X/Twitter at $9.74 billion, eliciting the "swindler" label from the former, Altman then went on-air to further denigrate Musk's gambit, speculating that it probably originated from "a position of insecurity."
We would hazard a guess that much more drama is in the offing before this feud cools down. Stay tuned!
