Elon Musk’s feud with OpenAI and Sam Altman hits high as battle for AI supremacy heats up

The bad blood between tech tycoons Tesla's Elon Musk and OpenAI's Sam Altman shows no sign of slowing down. Most recently, just as Mr Musk put together a bid to try to buy OpenAI, Mr Altman accused him of being deeply insecure and unhappy.

“I wish he would just compete by building a better product but I think there's been a lot of tactics, many lawsuits and other crazy stuff,” he told Bloomberg, referring to Mr Musk's unsuccessful attempt to buy OpenAI, which Mr Altman and OpenAI's board rejected.

Mr Musk has also tried to sue OpenAI, alleging the company had betrayed its founding principles of being a non-profit organisation that would ensure artificial intelligence would be for the greater good of the world.

“To this day, OpenAI Inc’s website continues to profess that its charter is to ensure that AGI [artificial general intelligence] 'benefits all of humanity',” the lawsuit claimed.

AGI is broadly defined as an advanced form of artificial intelligence capable of performing any intellectual task that a human can do, and its development is hotly pursued in the technology world.

“In reality, however, OpenAI, Inc has been transformed into a closed-source, de facto subsidiary of the largest technology company in the world: Microsoft. Under its new board, it is not just developing but is actually refining an AGI to maximise profits for Microsoft, rather than for the benefit of humanity,” the lawsuit said.

It is unclear when and if Mr Musk's case against OpenAI will go to trial, but the lawsuit is an unwanted distraction for Mr Altman and his company.

While it might seem like a novelty to have two of the business world's most prominent figures trading fire, it is actually a time-honoured tradition. In the race for entrepreneurial dominance, feuds between high-profile inventors, executives and moguls go back more than a century.

Sparks flew amid the innovation of electricity between Thomas Edison and Nikola Tesla. The automotive age gave rise to a bitter feud with no love loss between Henry Ford and Enzo Ferrari.

More recently, the dawn of the personal computer saw Steve Jobs and Bill Gates exchange insults in the press.

The latest barrage of insults between Mr Musk and Mr Altman revolves around the burgeoning AI technology sector, and it stretches back more than a decade, starting with the two men on the same side.

Back in 2017, the two appeared chummy as Mr Altman interviewed Mr Musk for technology start-up accelerator, Y Combinator, where they discussed the importance of the ethical implementation of AI.

At the time, they were both part of OpenAI, a new company on the Silicon Valley scene before AI was on the tip of almost every tongue and dominating global headlines. The company was originally set up as a non-profit research organisation.

According to OpenAI, Mr Musk questioned whether that was the best way to go, but he says he preferred to keep it a non-profit.

On a timeline on OpenAI's website, the company claims that in the autumn of 2017, Mr Musk “demanded majority equity, absolute control and to be chief executive”, with OpenAI operating as a for-profit company. The next year, OpenAI saidit would not give Mr Musk complete control of the company, and that he resigned as co-chairman shortly after.

At the time, some speculated that Mr Musk left OpenAI to focus on Tesla and Starlink, and to avoid a conflict of interests. Regardless of his motive, he would miss out on the company's introduction of ChatGPT.

“He was high on AI at the time but the priority for him wasn't there,” said Tim Bajarin, a long-time technology consultant and analyst who was chairman for Creative Strategies since 1981.

“But as a result, you know, these are two very egotistical characters, who each one believes they're right and they'll fight to the death, to be honest with you, to prove their position."

Mr Musk's departure from OpenAI's board could easily have fallen into the category of Silicon Valley lore of missed opportunities, especially as OpenAI announced its plan to evolve into a for-profit company.

Mr Musk founded his own for-profit AI company, xAI in 2023. That company, complete with one of the world's largest supercomputers based in Memphis, Tennessee, used Mr Musk's other company he bought, social-media platform X , to create a ChatGPT chatbot competitor called Grok 3.

Meanwhile, by most estimates OpenAI's valuation has reached $157 billion, while xAI's is estimated to have reached $50 billion. Even without other AI start-up competitors such as Anthropic, ScaleAI and Databricks factored in, the sheer amount of investment in the AI sector has underscored the potential wealth these companies can create, and just how high the stakes are for the investors and founders who back them.

Yet even with all the built-in advantages Mr Musk has with xAI, he still faces an uphill battle to unseat OpenAI's ChatGPT, which achieved first-mover advantage, and as a result, has become a household brand.

By any objective standard, for most users xAI still is not on the radar. Given the wealth it might fuel and the market doors it might open in terms of technology influence, the fact that Mr Musk walked away from being in on the ground floor at OpenAI is probably fuelling his desire to disrupt the company's future plans.

But Mr Bajarin says Mr Musk's political endeavours with US President Donald Trump may be chipping away at his focus and overall strategy to distract OpenAI.

“I would say that Musk has become toxic,” he said. "We are seeing protests against Trump, and then we have another set of protests against Musk, and in the valley, especially, there's guys now that have stickers on their on their Tesla that read, 'I bought this before I knew how bad Musk was'."

Mr Bajarin also said that Mr Musk's litigation tactics against OpenAI might prove to be more of a distraction for him in the long-run, and motivation for OpenAI to work harder.

“His lawsuit is supposedly to slow down ChatGPT, and it has had the exact opposite effect. OpenAI is accelerating what they're doing, and Sam Altman has already said that he's got glimpses of what could be AGI by the end of this year. And we've not heard anything like that from Musk.”

Yet even with all the momentum to his back, Mr Altman hasn't avoided taking the occasional shot at Mr Musk when asked about all of his attempted needling of OpenAI.

“Probably his whole life is from a position of insecurity,” Mr Altman told Bloomberg of Mr Musk's attempts to sue and OpenAI. “I don't think he's a happy person and I feel for him,” he added, before turning away from the topic.

“I just try to think about how we can make our own technology better.”