OpenAI’s Sam Altman deals with an unpredictable force that threatens his ambition to transform a startup into a trillion-dollar company: Elon Musk.
Since Donald Trump was elected president in November, ChatGPT-maker executives have been preparing to deal with the new US administration – a complicated process Muskova he emerged as a key confidant of the newly elected president.
OpenAI was among Musk’s rivals trying to predict how the billionaire might use his new vantage point in Washington, from pushing new regulations targeting the company to influencing the awarding of lucrative government contracts that could fuel Musk’s own artificial intelligence start-up xAI.
“I firmly believe that Elon will do the right thing and that it would be extremely un-American for him to use political power, to the extent that Elon has it, to harm his competitors and benefit his own business,” Altman told New York. Times conference last week.
Trump himself said Musk would put the national interest ahead of his companies, while Musk said on his social media platform X that rivals “rightfully” expected him to be generous.
“Nobody believes that for a second,” said a lawyer who has drawn Musk’s ire in the past.
After co-founding OpenAI in 2015, the relationship between Musk and Altman fell apart. The Tesla boss described Altman as a “fraudster Sam” and filed a claim lawsuits against him and OpenAI, accusing them of a “fraud of Shakespearean proportions” as they seek to undo a multi-billion dollar commercial partnership with Microsoft.
Musk is “unique,” according to OpenAI’s head of policy Chris Lehane, a political veteran who has helped companies like Airbnb and Coinbase navigate tricky regulatory hurdles. OpenAI’s approach would be to “control what we can control,” he added.
The company has emphasized its importance to Trump’s agenda on three fronts, according to Lehane: strengthening US competitiveness, especially against China, rebuilding the economy and strengthening national security. Altman is too donating $1 million of his own money into Trump’s inaugural fund.
“At the end of the day, every American, in or out of government (will) want to put the interest of the United States first,” Lehane said. “During the campaign and after it, this administration talked about the imperative . . . US-led AI prevails. If you want that to happen then OpenAI will have to be in the mix.”
OpenAI has been at the helm of a group of AI companies since the launch of ChatGPT in November 2022. It is currently changing its structure, in part to accommodate greater external investment in an attempt to stay ahead — a move Musk’s lawsuit claims betrays OpenAI’s original mission.
On Friday, OpenAI fired back in a blog post, claiming that Musk himself pushed for a similar structure in 2017, when he was still co-chairman. Musk “should be competing in the marketplace, not the courtroom,” the company said.
Reid Hoffman, founder of LinkedIn and board member of Microsoft, OpenAI’s biggest backer, said he was “certainly concerned” that Musk’s animosity toward Altman would reflect on Trump’s AI policy.
“Obviously (someone with) integrity and character would say, look, because I’m involved in these types of lawsuits and so on, I should be different from the government’s work on those things,” Hoffman said.
If Musk obscures his personal views and larger geopolitical rules and structures, it “harnesses potentially dangerous myopias and dangerous conflicts of interest,” he added.
People close to Musk said he was too principled to use his new role to target OpenAI with burdensome regulation, and that it made no sense to do so given his role as co-chairman of the new U.S. “government efficiency department” is to find ways to reduce regulation.
“You’re going to see a lot of red tape,” said one person who invested in Musk and Altman’s companies. “OpenAI will have a streamlined process to get its data centers up and running quickly. It will apply equally to all competitors,” they added.
Musk, however, could use his position as a central player in the new administration to push xAI, according to an investor in one of his companies. “The US government is the largest employer in the US,” the person said. “As (Musk’s) customer network expands, is the government becoming a big customer (for xAI)?”
Hoffman, a former OpenAI board member, speculated that Musk could use his position to slow down competitors to xAI.
“You could just do all those things if you’re implementing a government policy that’s trying to privilege one company over others,” he said, adding that it would “frankly be a very destructive thing to do.” It’s destructive to the industry, it’s destructive to American society.”
For now, the biggest challenge to OpenAI from Musk comes from direct competition from xAI, not political influence.
“In Musk’s companies, they have probably the largest proprietary data set anywhere. They have satellite images from Starlink, videos from Tesla cars and X data. They have a serious shot at it,” said a person who worked with both entrepreneurs.
xAI’s latest chatbot offering Grok-2, released in August, managed to compete with similar models from leading technology groups and is on the tail of Google’s Gemini, OpenAI’s ChatGPT and Meta’s Llama.
Earlier this year, Musk began work on Colossus, a supercomputer based in Memphis, Tennessee. By September, it was online and being used to train xAI’s large language model, Grok, a rival to OpenAI’s latest generative AI system, GPT-4. “From start to finish, it was done in 122 days,” Musk wrote on X.
The data center contains more than 100,000 Nvidia H100 graphics processing units, more than any other single AI computing cluster. Jensen Huang, Nvidia’s CEO, said in October that “there was only one person in the world who could do this,” and also said that Colossus is “easily the fastest supercomputer on the planet as a single cluster.”
“One feather in his cap — aside from torturing Altman — is the speed with which they destroyed Colossus,” said a major investor in a number of Musk’s companies, including SpaceX and xAI. “No one has the same computing power for AI and that’s a big thing, but there’s a lot to be determined.”
Regardless of Musk’s new advantage gained through his proximity to the president-elect, the investor said the biggest threat to OpenAI remains his position at the helm of overlapping businesses, his vast personal wealth and the ruthless work culture instilled in his companies.
“Elon can manifest things in the real world that others cannot,” they said.
Additional reporting by Stephen Morris in San Francisco
