Elon Musk wants to take over OpenAI

Summary

Marketplace Morning Report: "Elon Musk Wants to Take Over OpenAI" – February 11, 2025

Hosted by David Brancaccio, the Marketplace Morning Report delivers a comprehensive overview of the latest business and economic news. In this episode titled "Elon Musk Wants to Take Over OpenAI," listeners are immersed in a multifaceted discussion covering Elon Musk's ambitious bid for OpenAI, significant shifts within U.S. regulatory bodies, updates on the federal debt ceiling negotiations, and insights into military investments in climate technology.

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Elon Musk’s Attempted Acquisition of OpenAI

[00:01] David Brancaccio:
David opens the episode by highlighting a significant development in the tech industry: Elon Musk is spearheading a group aiming to acquire OpenAI, the organization behind ChatGPT. This move is characterized as either an unsolicited bid or a hostile takeover attempt.

[00:32] Nova Safo:
Nova delves deeper into the dynamics between Musk and OpenAI's CEO, Sam Altman. The two co-founded OpenAI, but Musk exited the organization in 2018. Currently, Altman is steering OpenAI towards becoming a fully for-profit entity, moving away from its original nonprofit roots. Musk opposes this transition, arguing that it undermines OpenAI's mission to advance artificial intelligence for public benefit. This disagreement has escalated into a legal battle, with projections suggesting the dispute could last another year. Nova cites a statement from Altman dismissing Musk's offer:

“Our structure ensures that no individual can take control of OpenAI.” [00:59]

Implications:
Musk's attempt to take over OpenAI for nearly $100 billion underscores the high stakes in the AI sector and raises questions about the balance between profit motives and ethical considerations in AI development.

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U.S. Justice Department Halts Bribery Prosecutions

[01:22] David Brancaccio:
The conversation shifts to a significant policy change under President Trump, who has directed the Justice Department to pause prosecutions for bribery under the Foreign Corrupt Practices Act (FCPA). This pause is temporary, pending a comprehensive review.

The FCPA has long been a cornerstone in preventing U.S. companies from engaging in bribery to secure foreign contracts, a practice that foreign firms sometimes exploit without similar repercussions. President Trump argues that the existing enforcement framework disadvantages American businesses, leading to missed opportunities on the international stage.

Market Reaction:
Following this announcement, U.S. stock indices, including the S&P and Nasdaq futures, experienced declines of about 0.3% to 0.4%. Additionally, the average 30-year fixed mortgage rate remained elevated, just above 7%, a notable increase from September's rates.

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Controversy Surrounding the Consumer Financial Protection Bureau (CFPB)

[01:22 - 03:57] Henry Epsteps' Segment:
Henry delves into the turmoil within the Consumer Financial Protection Bureau (CFPB), where the new leadership under the Trump administration has ordered employees to cease operations and remain out of the office. This directive has sparked lawsuits from employee unions:

• Challenges: One lawsuit contests the legality of the shutdown, while another aims to restrict access to organizational records, spearheaded by a group led by Trump advisor Elon Musk.

Background on the CFPB:
Lauren Saunders from the National Consumer Law Center provides historical context, explaining that the CFPB was established in 2010 in the aftermath of the Great Recession to centralize the regulation of consumer financial products, which was previously fragmented across various government entities. Andrew Metric from Yale University adds that the CFPB's centralized structure and funding from the Federal Reserve have endowed it with robust regulatory capabilities, making it a significant force against powerful financial interest groups.

Achievements:
Lindsay Owens from the Groundwork Collaborative highlights the CFPB's accomplishments, including returning over $21 billion to consumers and implementing crucial changes to banking and credit industry practices, such as excluding medical debt from credit scores.

Current Threats:
Despite its successes, the CFPB has faced persistent attacks over the years. With the Trump administration's current actions aiming to rollback its influence, Owens emphasizes that the necessity for consumer protection remains undiminished.

Quotes:

“Our structure ensures that no individual can take control of OpenAI.” – Sam Altman, OpenAI [00:59]

“It was in that context that Congress created the CFPB in 2010.” – Andrew Metric, Yale University [02:38]

“But the muscles of this agency, you know, directly impinged upon very, very powerful interest groups.” – Lindsay Owens, Groundwork Collaborative [03:07]

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Military Investments in Climate Technology

[03:57] Kai Rysdal:
Kai Rysdal introduces a segment from his show "How We Survive," focusing on the U.S. military's role in addressing climate change. As global temperatures soar, leading to devastating wildfires and a renewed withdrawal from the Paris Agreement, the military is allocating parts of its $850 billion budget towards sustainable initiatives. These include developing microgrids, advancing sustainable aviation fuel, and other climate resilience technologies. Kai underscores that while the climate crisis presents severe challenges, proactive investments in technology and infrastructure can mitigate its impacts.

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Congressional Maneuvering: The Debt Ceiling and Tax Cuts

[04:42] David Brancaccio:
David shifts the focus to the legislative arena, where Congress is embroiled in debates over the federal debt ceiling and potential extensions of tax cuts initiated during President Trump's administration. With Republicans holding a slim majority in the House of Representatives—bolstered by a few Republicans from traditionally Democratic ("blue") states—there's a precarious balance of power.

[05:10] Kimberly Adams:
Kimberly Adams, Marketplace's senior Washington correspondent, elaborates on the influence of "blue state Republicans." These are Republicans representing districts in heavily Democratic states like California, New Jersey, and New York. For instance, out of 90 House seats in these states, only 19 are held by Republicans, giving the party a narrow majority of three seats with two vacancies.

[05:42] Key Issues and Conflicts:
Adams explains that even a handful of dissenting blue state Republicans can significantly impact legislation. These members often face conflicting priorities: national party lines may advocate for policies that don't align with the economic interests of their constituents in liberal states. A prime example is the state and local tax (SALT) deduction.

[06:33] Focus on SALT Deduction:
The SALT deduction, capped at $10,000 in the 2017 tax reform, disproportionately affects residents of high-tax states, many of which are represented by blue state Republicans. Congressman Nicole Maliatakis from New York emphasizes the importance of reinstating or expanding the SALT deduction to alleviate financial burdens on his constituents.

Strategic Implications:
With the Republican majority being so slim, Adams and her colleagues underscore the potential for blue state Republicans to leverage their positions to secure policy concessions, such as tax relief, by threatening to withhold support on other legislative matters.

Quotes:

“The cap on SALT, that deduction was rolled back to $10,000 in the 2017 tax law and that really hurt a lot of folks in blue states, including in those Republican districts.” – Kimberly Adams [06:33]

“I think we are in a position because of our number that we can get some relief. And I don't know what it may be the exact number just yet, but it will be better than what we have today and it'll really only take a couple of them digging in to change the law.” – Congressman Nicole Maliatakis [06:58]

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Conclusion

This episode of the Marketplace Morning Report offers a deep dive into high-stakes corporate maneuvers, shifts in regulatory landscapes, strategic legislative negotiations, and the intersection of military initiatives with climate technology. By unpacking these complex issues, Marketplace ensures listeners are well-informed about the forces shaping the economic and political environment.

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Notable Quotes:

1. Sam Altman, OpenAI:
   “Our structure ensures that no individual can take control of OpenAI.” [00:59]

2. Andrew Metric, Yale University:
   “It was in that context that Congress created the CFPB in 2010.” [02:38]

3. Lindsay Owens, Groundwork Collaborative:
   “But the muscles of this agency, you know, directly impinged upon very, very powerful interest groups.” [03:07]

4. Congresswoman Nicole Maliatakis:
   “I think we are in a position because of our number that we can get some relief. And I don't know what it may be the exact number just yet, but it will be better than what we have today and it'll really only take a couple of them digging in to change the law.” [06:58]

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Transcript

[David Brancaccio]

Call it an unsolicited bid or a hostile takeover attempt, but of a nonprofit I'm David Brancaccio. Elon Musk is leading a group trying to buy artificial intelligence leader OpenAI, the maker of ChatGPT. The group says it's willing to pay nearly a hundred billion dollars for what is now a non profit trying to become a for profit. Musk says it is about safe AI and honoring the firm's charitable roots. But OpenAI's founder is not interested. Here's Marketplace's Nova Safo Elon Musk's purchase.

[Nova Safo]

Offer, employing a group of investors, escalates an ongoing feud between him and OpenAI's CEO Sam Altman. The two helped start the company, but Musk left in 2018. Now Altman wants to turn the ChatGPT maker into a fully for profit company. Currently there's a for profit subsidiary controlled by a nonprofit board. Musk has objected to that change, saying it violates the founding mission of OpenAI to focus on artificial intelligence research for the public good. The two sides are now in court battling over the company's future and based on a hearing last week, the legal wrangling could take at least another year. The Wall Street Journal says Altman wrote a message to employees dismissing Musk's offer, saying, quote, our structure ensures that no individual can take control of OpenAI. I'm NovaSafa for Marketplace.

[David Brancaccio]

President Trump has ordered the Justice Department to lay off prosecuting bribery cases under the Foreign Corrupt Practices Act. This is for now, pending a review. Companies have often felt at a disadvantage when foreign firms can sometimes bribe officials to get contracts while US Companies cannot, President Trump says. Under the nearly century old law, too often US Dealmakers worry about jail when they pick up the phone. Markets S and P and Nasdaq futures are down between 3 and 4/10 of a percent. The average 30 year fixed rate mortgage is holding at just above 7%. It was nearly a percentage point lower in September. The new head of the Consumer Financial Protection Bureau has ordered employees to stop work and stay out of the office, prompting lawsuits by unions representing the employees. One challenges the shutdown, another says seeks to limit access to records by the group, led by Trump advisor Elon Musk. Marketplace's Henry Epsteps back to look at the problems the CFPB was set up.

[Lauren Saunders]

To solve in the lead up to the Great Recession. There were a lot of companies offering risky mortgages and loans, says Lauren Saunders at the National Consumer Law Center.

[Andrew Metric]

Pick a payment loans and exploding interest rate loans that were not affordable and they were doomed to fail.

[Lauren Saunders]

It was in that context that Congress created the CFPB in 2010. Before that, regulation of consumer financial products was scattered across different parts of the government. This put it all in one place, says Andrew Metric at Yale.

[Lindsay Owens]

It's centralizing and narrowing, right? Clear mandate, and then one place where, where that mandate is enforced.

[Lauren Saunders]

The CFPB gets its funding from the Federal Reserve, not Congress. That's made it a more muscular regulatory body, Metric says.

[Lindsay Owens]

But the muscles of this agency, you know, directly impinged upon very, very powerful interest groups.

[Lauren Saunders]

And so it's come under attack for years. Meanwhile, it's returned over $21 billion to consumers and it's changed the rules for banks, lenders and credit agencies, says Lindsay Owens at think tank the Groundwork Collaborative. For example, to make sure that medical.

[Andrew Metric]

Debt wasn't counted against you on your credit history or credit score.

[Lauren Saunders]

Now, the Trump administration may turn back the clock to 2010, but Owens says the need for consumer prot protection isn't going away. I'm Henry Epp for Marketplace.

[Kai Rysdal]

Hi, I'm Kai Rysdal, the host of How We Survive. This season is all about the institution that shaped me, the US military and how it could shape the future of climate tech. You've probably heard that 2024 was the hottest year on record, that wildfires devastated Los Angeles and that the US withdrew from the Paris Agreement again. And while all that might feel pretty terrible, the climate crisis is not an inevitable reality. From simulated climate emergencies to micro grids and sustainable aviation fuel, we look at how the military is investing part of its $850 billion budget in a greener, less, more resilient future. Listen to How We Survive. Wherever you get your podcasts.

[David Brancaccio]

In the hurly burly of recent weeks, you may have forgotten there's more to government than the executive branch. But Congress will be busy trying to deal with the federal debt ceiling and in the coming months deciding whether to extend the tax cuts from the first Trump administration. Republicans have very narrow majorities, and in the House of Representatives, a subset of lawmakers might be inclined to throw their weight around. Call them blue state Republicans. Marketplace's senior Washington correspondent Kimberly Adams is following this. Kimberly, welcome.

[Kimberly Adams]

Good morning, David.

[David Brancaccio]

So how big a group we talking about here?

[Kimberly Adams]

So this is like the handful of Republicans holding districts in these pretty solidly blue states like California, New Jersey and New York. And in just those three states, for example, which have altogether 90 seats in the House, just 19 of them are held by Republicans. But with just a three seat advantage and two vacancies in the House Republicans have this tiny majority. So even if just four or five of these blue state Republicans dig in on a particular issue, it's going to matter.

[David Brancaccio]

I mean, broad brush, how does that group's concerns differ from those of the more broader GOP majority?

[Kimberly Adams]

A lot of it is a line, but because many of these folks are representing districts where the general priorities of many of their constituents in these blue states may clash with those of their party, especially in terms of economic policy, where maybe the House GOP is eyeing spending cuts that would hurt these Republican districts in blue states. Jennifer Victor teaches political science at George Mason University.

[Andrew Metric]

When you're in the majority, often the concern not becomes so much about being a deficit hawk or a debt hawk, but it's more about delivering goods or benefits back to the constituents.

[David Brancaccio]

All right, so let's get specific on some policies where this group would be likely to want to have its concerns addressed.

[Kimberly Adams]

The big one is tax policy really in particularly the state and local tax deduction, or SALT. The cap on SALT, that deduction was rolled back to $10,000 in the 2017 tax law and that really hurt a lot of folks in blue states, including in those Republican districts. Republican Congresswoman Nicole Maliatakis represents parts of New York City and she says SALT is a top priority for her and other blue state Republicans.

[Andrew Metric]

I think we are in a position because of our number that we can get some relief. And I don't know what it may be the exact number just yet, but it will be better than what we.

[Kimberly Adams]

Have today and it'll really only take a couple of them digging in to change the law.

[David Brancaccio]

Alright, lots of power there. Marketplace's senior Washington correspondent, Kimberly Adams. Thank you so much.

[Kimberly Adams]

You're welcome, David.

[David Brancaccio]

And I'm David Brancaccio. You're listening to the Marketplace Morning report from APM American Public Media.

[Kai Rysdal]

This economy can be complicated. That's why the Marketplace newsletter makes understanding it all simple. Get smart takes on the week's biggest stories delivered to your inbox every Friday. No jargon, no hype, just economics you can use. Sign up [e-mail] subscribe.