It’s fair to say Elon Musk has the tech world in the palm of his hand.
Major developments in Musk-land include a $97.4 billion conditional bid for OpenAI, more controversy around his shadowy ‘DOGE’ government efficiency department, and preparations for the big release of Grok 3. The convergence of these initiatives has both Silicon Valley and Wall Street on the edge of their seats.
Grok 3 release with live demo on Monday night at 8pm PT.
Smartest AI on Earth.
— Elon Musk (@elonmusk) February 16, 2025
Musk says he will withdraw his lowball OpenAI offer if the company maintains its nonprofit status. The condition, revealed in a court filing, comes as OpenAI continues its planned transition from nonprofit to a Delaware-based public benefit corporation. His lawyers stated in the Wednesday filing that he would withdraw the bid if “OpenAI board is prepared to preserve the charity’s mission and stipulate to take the ‘for sale’ sign off its assets by halting its conversion.”
The timing is notable given OpenAI’s recent gains in the generative AI space, with its ‘deep research’ and 03-mini models receiving plenty of attention and praise. With recent valuation discussions reaching as high as $300 billion, Musk’s $97.4 billion bid sits well below market expectations. “I think it’s fair to be pretty suspicious of this considering that he has a competitor himself,” noted Christie Pitts, a tech investor at Panasonic Well, referring to Musk’s own AI venture, xAI.
OpenAI CEO Sam Altman swiftly dismissed the offer on X with a counter-proposal to “buy twitter for $9.74 billion,” to which Musk responded by calling Altman a “swindler.” Altman later commented on Musk’s motivations, saying, “probably his whole life is from a position of insecurity, I feel for the guy” and adding, “I don’t think he’s, like, a happy person. I feel for him.”
DOGE Controversy Deepens
The Treasury Department’s inspector general is launching an audit of Musk’s Department of Government Efficiency (DOGE) following serious concerns about its access to federal payment systems. The controversy erupted after Marko Elez, a 25-year-old Musk associate, was granted edit access to systems containing personal details of millions of Americans and controlling trillions in federal disbursements.
Democratic attorneys general from 14 states have filed a legal challenge, arguing that DOGE’s creation was unconstitutional as Trump established the department without congressional approval. They allege Musk has wielded “virtually unchecked power,” entering government agencies and ordering sweeping cuts without proper oversight.
A judge has temporarily blocked DOGE’s access to the Treasury payment system, prompting Musk to call for the judge’s impeachment. Vice President JD Vance defended the administration, arguing that judges cannot interfere with presidential “legitimate power” – though constitutional law experts contest this interpretation.
Grok 3 Launch Approaches
Against this backdrop of controversy, xAI is preparing to release Grok 3, which Musk describes as offering “unprecedented natural conversation capabilities and real-time market integration.” Early previews indicate the system has been extensively trained on financial data, suggesting potential applications in market analysis and financial forecasting.
In keeping with some of Musk’s strict hiring practices, an xAI employee recently resigned, after being threatened with the sack for posting on X about Grok 3; ranking it amongst its competitors.
OpenAI’s Evolution and the Musk/Altman Feud
The OpenAI bid intersects with the company’s ongoing structural changes. Founded as a nonprofit in 2015, the organization later created a capped-profit subsidiary to enable capital raising while maintaining its original mission. The current plan to convert into a Delaware-based public benefit corporation follows the model of competitors like Anthropic and Inflection AI.
The situation has political implications. Despite Musk’s role as President Trump’s efficiency advisor, OpenAI, not xAI, was selected as a key partner in Trump’s $500 billion “Stargate” AI infrastructure project. Musk has questioned the project’s financing, while Trump has noted that Musk “hates one of the people in the deal.”
What Happens Next
While OpenAI CEO Sam Altman swiftly dismissed Musk’s offer on X with a counter-proposal to “buy twitter for $9.74 billion,” the board must formally respond within three months. The personal dimension of the conflict was evident in the exchange, with Musk calling Altman a “swindler,” while Altman responded that Musk’s actions stem from “insecurity,” adding, “I don’t think he’s, like, a happy person. I feel for him.”
According to Wall Street Journal reports, Musk’s offer could force OpenAI’s board to reassess how it values the nonprofit and its stake in any future for-profit entity, potentially complicating the planned restructuring.
Grok 3 is due to be demonstrated later today, and we’ll bring you all the updates from that update as they emerge.
