Hot take on Musk’s bid to take over the OpenAI nonprofit, from my newsletter: 1Altman desperately needs to ditch the OpenAI nonprofit. It’s become an albatross around his neck. His business is burning cash, and investors don’t like the nonprofit. And in the last round of funding, OpenAI reportedly agreed to convert its recent $6,6B investment into debt, if the company is unable to convert the for-profit wing of OpenAI into a freestanding profit within two years of accepting that investment. The clock as ticking. 2As the organization Public Citizen previously explained (and as I once reported here), making the conversion required compensating the nonprofit for giving up control of the for profit. 3How much is that worth? Some people had previously speculated that the nonprofit’s cut should be around $40 billion — which in essence would the cost of OpenAI For Profit’s freedom. 4By turning down Musk’s bid, Altman makes it hard to justify paying the nonprofit anything less than the $97B that was just offered. Roughly speaking, this means that (at little real cost, since the bid was never going to be accepted) Musk has more than doubled the cost of OpenAI for-profit’s freedom. (E.g., if OpenAI for-profit tries now to offer a mere $40B to the non-profit, in exchange for breaking off as a for-profit, the Attorney General of Delaware or the Attorney General of California can strongly argue that that number is no longer fair market value, and block the deal.) 5All of this has the effect of potentially slowing down Musk’s competitor Altman, who can ill afford an extra $50B+ outlay given his current cash flow situation. And OpenAI’s investors are all now staring at a lot of unexpected potential dilution.