OpenAI is moving to block Elon Musk from gaining control, with top executives considering special voting rights for its non-profit board, according to a report from the Financial Times on Tuesday. The company’s leadership, including CEO Sam Altman, is reportedly discussing governance changes to protect OpenAI from hostile acquisitions, especially as it transitions into a for-profit structure.
Elon, who co-founded OpenAI in 2015 before leaving in 2018, made an unsolicited $97.4 billion bid to buy the company, a deal OpenAI’s board immediately rejected last Friday.
The offer came from an Elon-led investor group that sought to take over OpenAI’s operations and stop its move towards profit-driven AI development. The FT report says OpenAI’s leadership sees Elon as a direct threat and is considering governance rules that would let the non-profit board overrule major investors, including Microsoft and SoftBank.
Elon escalates fight with OpenAI after takeover rejection
Elon launched xAI in 2023 to directly compete with OpenAI, criticizing its decision to pivot toward profit-driven AI.
Just days after OpenAI shut down his acquisition attempt, Elon responded with Grok-3, xAI’s latest AI model, claiming it outperforms OpenAI’s GPT-4o, Google’s Gemini, Anthropic’s Claude, and DeepSeek’s V3.
During a Monday live stream, Elon, alongside three xAI engineers, revealed that Grok-3 has “more than 10 times” the compute power of its previous version and completed training in early January. The AI model, Elon claimed, is faster, more powerful, and ahead of anything OpenAI has released.
However, his performance claims remain unverified, and no independent tests have confirmed Grok-3’s superiority over GPT-4o or its competitors.
OpenAI executives have not publicly responded to Elon’s Grok-3 announcement, but the FT claims that the company sees xAI as a long-term competitive threat.
Unlike OpenAI, which operates with heavy Microsoft backing, Elon is raising around $10 billion for xAI’s next funding round, which would value the company at roughly $75 billion, according to a report from Bloomberg.
US-China AI race intensifies as OpenAI faces new rivals
OpenAI’s challenges extend beyond Elon. China’s DeepSeek is emerging as a major competitor, shocking the AI industry with a low-cost model that rivals OpenAI’s technology. Last month, DeepSeek announced its R1 model, claiming it was trained for under $6 million—a fraction of the billions spent by OpenAI, Anthropic, and Google on their AI models.
OpenAI is investigating whether DeepSeek used its AI models to train DeepSeek R1, saying on Monday that it suspects that DeepSeek relied on a method called “distillation”, where a smaller AI model is trained using data from a larger, more advanced AI system.
At the Artificial Intelligence Action Summit in France, multiple tech executives tallegedly old CNBC that DeepSeek’s breakthrough proves China is closing the AI gap with the US. OpenAI’s global affairs chief, Chris Lehane, warned that DeepSeek is part of an “intense AI competition” between US-backed and Chinese-backed systems, calling DeepSeek an “authoritarian AI model”.
Despite DeepSeek’s success, critics point to censorship issues. When asked about the 1989 Tiananmen Square massacre, DeepSeek’s AI assistant refused to answer, responding with: “Sorry, that’s beyond my current scope. Let’s talk about something else.
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