OpenAI’s Sam Altman is reckoning with an unpredictable force that threatens his ambition of transforming the start-up into a trillion-dollar company: Elon Musk.
Since Donald Trump was elected president in November, executives at the ChatGPT-maker have been preparing to deal with the incoming US administration — a process complicated by Musk’s emergence as a pivotal confidant of the president-elect.
OpenAI has been among Musk’s rivals who are trying to anticipate how the billionaire may use his new vantage point in Washington, from pushing for new regulations that target the company to influencing the award of lucrative government contracts that could boost Musk’s own artificial intelligence start-up xAI.
“I believe pretty strongly that Elon will do the right thing and that it would be profoundly un-American to use political power, to the degree that Elon has it, to hurt your competitors and advantage your own businesses,” Altman told a New York Times conference last week.
Trump himself has said Musk would put the national interest ahead of his companies, while Musk said on his social media platform X that rivals were “right” to expect him to be magnanimous.
“No one believes that for a second,” said a lawyer who has incurred Musk’s wrath in the past.
Having founded OpenAI together in 2015, the relationship between Musk and Altman has collapsed. The Tesla chief has described Altman as “swindly Sam” and filed lawsuits against him and OpenAI accusing them of “deceit of Shakespearean proportions” while seeking to void its multibillion-dollar commercial partnership with Microsoft.
Musk is “unique”, according to OpenAI’s policy chief Chris Lehane, a political veteran who has helped companies such as Airbnb and Coinbase navigate tricky regulatory obstacles. OpenAI’s approach would be to “control what we can control”, he added.
The company was emphasising its importance to the Trump agenda on three fronts, according to Lehane: boosting US competitiveness, particularly against China, rebuilding the economy and bolstering national security. Altman is also donating $1mn of his own money to Trump’s inaugural fund.
“At the end of the day, every American, in or out of government [is] going to want to put the interest of the US first,” Lehane said. “This administration talked over the campaign and since about the imperative of . . . US-led AI prevailing. If you want that to happen then OpenAI is going to have to be in the mix.”
OpenAI has been at the front of the pack of AI companies since launching ChatGPT in November 2022. It is currently changing its structure, in part to accommodate greater external investment in a bid to remain ahead — a move which Musk’s lawsuit alleges betrays OpenAI’s original mission.
On Friday, OpenAI fired back in a blog post, claiming Musk himself pushed for a similar structure in 2017, when he was still co-chair. Musk “should be competing in the marketplace rather than the courtroom,” the company said.
Reid Hoffman, founder of LinkedIn and board member at Microsoft, OpenAI’s biggest backer, said he was “certainly worried” that Musk’s animosity towards Altman would play out in Trump’s AI policies.
“Obviously [someone with] integrity and character would say, look, since I’m involved in these kinds of lawsuits and so forth, I should keep myself distinct from the operation of government in these things,” said Hoffman.
Should Musk blur his personal views and larger geopolitical rules and structures, it “portends 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 onerous regulation, and it made no sense to do so given his remit as the co-chair of a new US “department of government efficiency” is to find ways to slash regulation.
“You will see a bunch of red tape cut,” said one person who has invested in Musk and Altman’s companies. “OpenAI will have a streamlined process for getting their data centres up and running quickly. It will be equally applied across the competitor set,” they added.
Musk could, however, leverage his position as a central player in the incoming administration to boost xAI, according to an investor in one of his companies. “The US government is the biggest employer in the US,” the person said. “As [Musk’s] web of customers expands, does the government become a large 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 of that kind of thing if you’re implementing government policy to try to privilege one company over others,” he said, adding that it would be “frankly a very destructive thing to do. It’s destructive for the industry, it’s destructive for American society.”
For now, OpenAI’s biggest challenge from Musk comes from direct competition from xAI, rather than political leverage.
“Across Musk’s companies they have probably the largest proprietary data set anywhere. They have satellite images from Starlink, videos from cars at Tesla and X data. They are having a serious crack at it,” said a person who has worked with both entrepreneurs.
xAI’s latest chatbot offering Grok-2, released in August, has managed to compete with similar models from leading tech groups, and is on the tail of Google’s Gemini, OpenAI’s ChatGPT and Meta’s Llama.
Earlier this year, Musk started 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 centre houses more than 100,000 Nvidia H100 graphics processing units, more than any other individual AI compute cluster. Jensen Huang, chief executive of Nvidia, said in October that “there was only one person in the world who could do that”, and has also referred to Colossus as “easily the fastest supercomputer on the planet as one cluster”.
“The one feather in his cap — other than torturing Altman — is the speed they put out Colossus,” said a large investor in a number of Musk’s companies, including SpaceX and xAI. “Nobody has the same compute power for AI and that’s a big deal, 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 remained his position at the helm of overlapping businesses, a vast personal fortune and the relentless working culture instilled at his companies.
“Elon can manifest things in the real world that others can’t,” they said.
Additional reporting by Stephen Morris in San Francisco