Shares of the electric-vehicle maker Tesla were up 4% again in Thursday trading.
Elon Musk is willing to withdraw his $97.4 billion bid for the nonprofit that controls ChatGPT-developer OpenAI. His price? Just that it stops its bid to become a for-profit company.
"If [the] OpenAI board is prepared to preserve the charity's mission and stipulate to take the 'for sale' sign off its assets by halting its conversion, Musk will withdraw the bid," lawyers for Musk said in a court filing Wednesday.
The bid was launched by a Musk-led consortium Monday and has been roundly rejected by OpenAI Chief Executive Sam Altman, who subsequently accused the Tesla and xAI CEO of using the offer as a way to interfere with his company's operations.
It's very unlikely that Musk's bid will be successful, with OpenAI not entertaining any external offers. The company overall has a valuation of $157 billion and The Wall Street Journal has previously reported that it is in discussions to raise $40 billion at a $300 billion valuation.
However, the continuing legal spat between Musk and OpenAI is complicating the latter's efforts to convert itself into a for-profit business. That involves tricky negotiations over exactly what stake the nonprofit body will retain in the business as compared with corporate backers such as Microsoft, which has pumped $13 billion into OpenAI since 2019.
Musk's offer threatens to push up the value of the nonprofit arm and therefore reduce the equity of its other investors following the conversion into a for-profit company.
OpenAI is juggling the conversion plan, its role in a project to spend up to $500 billion on computing infrastructure through a joint venture called Stargate, a court fight with Musk, and the race to develop more powerful AI models.
At least in public, Altman is brushing off the dispute. He said OpenAI plans to release its GPT-4.5 and GPT-5 models within "weeks" and "months" respectively, in a post on social-media platform X on Wednesday.
Meanwhile, Musk said Thursday that his xAI start-up is close to releasing the newest version of its own AI chatbot Grok. Nvidia has also invested in xAI, which trains its models on hundreds of thousands of the company's chips.
"Grok 3 has very powerful reasoning capabilities, so in the tests that we've done thus far, Grok 3 is outperforming anything that's been released," Musk said in an appearance at the World Governments Summit in Dubai via video call.
Ives still believes Musk's Washington relationship will yield benefits for the auto maker. "The deregulatory landscape in the Beltway will lay the groundwork for a federal autonomous road map which we believe unlocks a $1 trillion of valuation alone for Tesla over the coming years, " he wrote.
Ives rates Tesla stock at Buy with a $550 price target. That values Tesla at about $1.8 trillion. Morgan Stanley analyst Adam Jonas rates shares Buy, too. His price target is $430.
"Tesla is well positioned in the metamorphosis of U.S. manufacturing in the AI era," wrote Jonas in a Wednesday report. "Data is defining the software. Software is defining the hardware. Hardware is defining the manufacturing."
He views Tesla as a vertically integrated AI play. Tesla has millions of cars on the road, generating data, which can develop the software to make cars drive themselves. It also has the manufacturing expertise to build the cars.
To be sure, those are two bulls are convinced Tesla is far more than a car company. Their target prices for Tesla stock average $490, while the average analyst price target is about $381, according to FactSet.