Wedbush analysts believe Tesla (NASDAQ:TSLA) CEO Elon Musk's unsolicited $97.4 billion bid for OpenAI's controlling nonprofit is unlikely to succeed but is intended to slow down the company's capital-raising efforts.
The firm, led by Daniel Ives, noted that OpenAI's true valuation is closer to $300 billion, making the bid non-competitive. CEO Sam Altman quickly dismissed the offer, reaffirming that OpenAI is not for sale. The move escalates the long-standing rivalry between Musk and Altman, dating back to Musk's co-founding of OpenAI in 2015 and its transition to a for-profit entity in 2019.
Musk also sued OpenAI last year, claiming it prioritizes profits over its original nonprofit mission. OpenAI, backed by Microsoft (MSFT) and Nvidia (NASDAQ:NVDA), recently raised $6.6 billion, valuing it at $157 billion, while reports suggest SoftBank (SFTBY) may invest up to $40 billion, potentially valuing OpenAI at $260 billion. Wedbush expects OpenAI's board to formally reject the bid, but sees it as an added complication in Altman's efforts to secure further funding.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.