WSJ Tech News Briefing: Inside How Musk and Altman Went From Friends to Bitter Enemies
Episode Release Date: February 21, 2025
Host: Charlotte Gartenberg
Reporter: Berber Ginn
Introduction
In this high-stakes episode of the Wall Street Journal's Tech News Briefing, Charlotte Gartenberg delves into the tumultuous relationship between two of the tech industry's most influential figures: Elon Musk and Sam Altman. Once friends and co-founders of OpenAI, their alliance has deteriorated into one of the most personal and public rivalries in recent business history. Reporter Berber Ginn provides an in-depth exploration of how this enmity unfolded, the strategic maneuvers each has employed, and the broader implications for the AI industry.
From Friends to Founders: The Early Relationship
Charlotte Gartenberg sets the stage by highlighting the once cordial partnership between Musk and Altman:
"They began as friends and business partners... co-founded OpenAI in 2015." [03:42]
Berber Ginn recounts their initial connection:
"Altman was introduced to Musk through a mutual contact, arranged a tour of the SpaceX factory, and was struck by Musk's ambition." [03:42]
Altman's admiration for Musk's vision led to their collaboration in founding OpenAI, with Musk providing significant funding and taking a leadership role in the nascent organization.
The Power Struggle and Fallout
The camaraderie began to fray as differing visions for OpenAI emerged. By 2017-2018, tensions escalated over control and the company's direction.
Berber Ginn explains:
"Musk wanted more control over OpenAI and sought to become the de facto CEO, leading to a power struggle." [04:38]
Altman, leveraging support from fellow co-founders, countered Musk's bid, ultimately prevailing and solidifying his position as CEO. This internal conflict marked the beginning of their estrangement.
Musk’s Hostile $97.4 Billion Bid for OpenAI
Musk's frustration culminated in a dramatic move:
"He followed this up with a hostile $97.4 billion bid for the assets of the nonprofit that controls OpenAI." [02:16]
Berber Ginn elaborates on the rationale behind the bid:
"By making this offer, Musk was signaling a valuation of $97 billion, challenging the nonprofit board to consider his terms amidst the transition to a for-profit model." [02:28]
The bid was swiftly dismissed by OpenAI’s board, who deemed it inconsistent with their mission to develop AI for humanity's benefit.
The Rise of XAI: Musk’s Foray into AI
In response to OpenAI's advancements, Musk launched his own AI venture, XAI:
"Elon Musk raised a flag about OpenAI moving too fast, then launched XAI shortly after ChatGPT's success." [06:33]
Berber Ginn assesses XAI's market impact:
"XAI has struggled to gain traction despite substantial funding and talent recruitment, barely making a noticeable mark against ChatGPT's ubiquity." [06:53]
Despite aggressive strategies, including high-profile advertising, XAI remains a minor player in the competitive AI landscape.
Stargate Project and Political Maneuvering
A pivotal moment in the rivalry was the Stargate initiative, a half-trillion-dollar investment in AI infrastructure announced with President Trump’s involvement.
Berber Ginn reveals:
"On his first full day in office, President Trump and Sam Altman announced Stargate, a major AI investment." [01:28]
Musk, observing the announcement, reacted angrily, publicly disputing Altman's capabilities and leveraging his influence on social media:
"Musk was livid upon seeing the announcement and took to X to express his displeasure." [01:28]
Berber Ginn further explains how Altman secured political backing:
"Altman collaborated with Masayoshi Son of SoftBank and Larry Ellison of Oracle, both influential figures with ties to Trump, to propel Stargate forward." [09:01]
This strategic alliance enabled Altman to navigate the politically charged environment, securing presidential support despite Musk's opposition.
Musk's Retraction of the OpenAI Bid
After facing resistance, Musk retracted his hostile bid under specific conditions:
"Musk said he would retract the bid if OpenAI remained a nonprofit, an outcome he deemed unlikely." [10:12]
This move underscored Musk's unwillingness to compromise on OpenAI’s foundational structure, further deepening the rift between him and Altman.
Implications for the AI Industry and Politics
The feud between Musk and Altman extends beyond personal animosity, significantly impacting the AI sector's trajectory and its intersection with politics.
Berber Ginn outlines the high stakes:
"Control over AI agenda-setting with President Trump and the race to achieve artificial general intelligence are at the core of this rivalry." [10:51]
The competition for AGI dominance drives these tech titans to undermine each other, as securing political favor and technological supremacy are seen as crucial for legacy and industry leadership.
Conclusion
The once-promising collaboration between Elon Musk and Sam Altman has devolved into a fierce rivalry with substantial consequences for the AI industry's future. As Musk attempts to assert control and challenge OpenAI’s strategic direction, Altman leverages political alliances to advance his vision for AI development. This bitter conflict underscores the intense competition and high stakes inherent in the quest to pioneer artificial general intelligence, shaping the landscape of technology and its governance for years to come.
Produced by Jess Jupiter. Additional support from Julie Chang, Jessica Fenton, Michael Ovalle, Kathryn Millsop, Ayesha Al Muslim, Scott Salloway, Chris Zinsley, and Falana Patterson.