Elon Musk’s hostile bid for control of OpenAI

We spent a lot of time on the phone over the past 24 hour trying to understand Elon Musk’s hostile offer for Sam Altman’s OpenAI. Few could have predicted the latest development in their corporate war (or soap opera). Altman is in Paris for an A.I. summit. What does it mean to make an aggressive bid for a non-profit? How can board members balance their fiduciary obligations to investors of a for-profit subsidiary with the mission of their institution? Bret Taylor is the board chair. Taylor is better equipped to deal with a hostile offer by Musk, as he was the chairman of Twitter’s board at the time Musk bought it. Musk’s $97 billion spoiler attempt

The most recent twist in the OpenAI saga is Elon Musk. The consortium led by Musk put a $97.4-billion offer on the table in order to essentially take control of OpenAI. A sign of how things are going: Altman rejected the offer on X, writing, “no thank you but we will buy twitter for $9.74 billion if you want.” Musk replied, “Swindler.”

The blockbuster bid complicates things for OpenAI

. SoftBank is about to sign a deal worth $40 billion with the start-up, which will value it at $300 billion. Altman is also trying to complete a plan that will transform OpenAI from a nonprofit to a for-profit company. Bret Taylor and Larry Summers are among the board members. Summers was the former Treasury Secretary who Musk had criticized for his purchase of Twitter. Musk is trying to get Altman to pay more money to turn OpenAI into a profit-making company. Musk and Altman founded OpenAI as a charitable A.I. lab in 2015. They’ve been feuding openly for years. Musk filed a number of legal complaints, accusing Altman of deviating from the nonprofit’s goals. Investors in the start-up pushed for a restructure of the organization to become a for-profit company. This would allow it to have fewer complications with control. Altman has two years to make this change, or OpenAI will have to return the money it has raised.

Here’s how the conversion would work.

Altman has to compensate OpenAI’s nonprofit division, which controls the money-making division. He could either pay a one-time payment or give the nonprofit a small stake in the for-profit company. It also adds pressure to any regulatory review. Altman’s deal must be equal to or better to Musk’s to gain approval. OpenAI has some defenses. Musk tried to back out of his offer to purchase Twitter. OpenAI could also question Musk about his financial situation. Musk’s wealth, which is largely tied to Tesla stock, may not be easy to tap. Musk’s bid will be partially backed by his A.I. venture, xAI, which was last valued at as much as $40 billion.

Altman threw another jab this morning. Asked on Bloomberg Television this morning if Musk’s move was driven by insecurity about xAI’s standing, the OpenAI chief said, “Probably his whole life is from a position of insecurity.”

Altman added, “I don’t think he’s a happy guy. I feel for him.”

HERE IS WHAT IS HAPPENING The Justice Department is looking to drop charges against Eric Adams.

Manhattan’s prosecutors were told by Washington to drop their case against New York City Mayor Eric Adams, who was indicted last September in a federal criminal corruption case. This raises concerns about the independence of federal prosecutors during the Trump era. It’s unclear whether Danielle Sassoon, the acting head of the U.S. attorney’s office in Manhattan, will obey the order.

President Trump pressures Jordan and Egypt to take Gaza residents. He threatened to cut aid to Middle East countries that refused to accept his demand for them to take in the majority of Palestinians from Gaza. This suggests he is serious about his controversial — and possibly illegal — plan to clear the area. Separately, Trump signed an executive order that stops enforcement of a decades-old ban on companies bribing foreign officials to win business.

Meta begins cutting thousands more positions. The tech giant has started notifying employees that they will be laid off, according to Business Insider, making good on Mark Zuckerberg’s warning that low-performing staff members would lose their jobs. Meta has committed to spending up to $65 billion this year to keep up in the artificial intelligence race, raising a need to offset that investment.

Behind the scenes of Europe’s big A.I. summit

Prominent names in geopolitics and technology have gathered at the Artificial Intelligence Action Summit, the star-studded gathering convened by France to underscore Europe’s relevance in the A.I. Race.In an address on Tuesday, Vice-President JD Vance urged Europeans not to be too strict with rules. “We believe excessive regulation of A.I. “We believe that excessive regulation of the A.I. Sam Altman, the C.E.O. industries flourish. Altman told Bloomberg Television that the biggest question he has heard is “Can you build a Stargate data center in my country?” This refers to the massive project he is leading. Kevin Roose is The Times’s technology columnist and cohost of the Hard Fork Podcast. He shares with DealBook the things he hears in the Grand Palais hallways:

The biggest guessing game: what will President Trump do about A.I. What will President Trump do on A.I. Some hope that Elon Musk, who runs an A.I. Run amok — will convince the president to adopt a more cautious stance. Others believe that venture capitalists, and so-called A.I. The accelerationists, like Marc Andreessen the investor, who are in Trump’s orbit will convince him to leave A.I. Europe regrets its regulation. The European Union was a leader in A.I. The European Union is ahead of the game in A.I. Act is scheduled to come into effect in phases over the next 12 months. Some European leaders are concerned that the rules will hurt the competitiveness of the EU. This is in response to a report from Mario Draghi, former Italian Prime Minister, who blamed excessive regulations for Europe’s slow growth. A.I. executives from the United States told me that they still considered Europe a difficult place to do business compared with larger markets like India. Executives from American A.I. Doomers were pushed to the side. There is much less talk about A.I. There is much less talk about A.I. This partly reflects Macron’s deliberate decision to highlight the positive aspects of the technology. It also reflects an industry-wide shift, where executives seem to have realized it’s easier for policymakers to be excited about A.I. if they’re not worried it’s going to kill them.

Policymakers aren’t feeling the A.G.I. Though some industry leaders claim that artificial general intelligence, a human-level A.I. The system could be built in a year or so, but the discussions I heard in Paris did not have the urgency that you would expect given the timelines. The policymakers don’t seem to understand how powerful A.I. is. “Any hint that payments authorized by Congress will be suspended selectively is a breach of confidence and ultimately a default. Judges have been voicing their opposition to President Trump’s efforts to disrupt the federal government. This, and other attempts by the president, has set up a potential constitutional crisis. That, and other efforts by President Trump to disrupt the federal government, have continued to draw opposition from judges, setting up a potential constitutional crisis.

Striking back at Trump’s tariffs

World leaders are scrambling to respond to President Trump’s latest trade-war salvo: his 25 percent tariffs on all steel and aluminum imports, with a warning that more measures, including reciprocal tariffs, are on the way.

Trump said the metals levies will go into effect “without exception.” But signs of tit-for-tat retaliation show growing risks of new trade barriers that could stifle growth and drive up costs for companies and consumers.It isn’t just China. The European Union, with a $230 billion surplus in trade with the U.S., and Canada, America’s largest steel supplier, are ready to respond. event in Paris, Prime Minister Justin Trudeau of Canada said “Canadians will stand up strongly and firmly if we need to.”

Meanwhile, Cynthia Kiang, Taiwan’s deputy economy minister, is expected to arrive in Washington on Tuesday to try to extract exemptions for the island’s huge semiconductor industry.Market winners and losers are emerging.

S&P futures are in red. Gold, the classic haven for investors, continues to trade around a record high.European auto stocks were down: Germany’s automotive industry is viewed as especially vulnerable to a Trump trade war.

Trump called the tariff move a “big deal.”

He has long regarded America’s ballooning trade deficit as a sign of weakness, and he sees tariffs as a tool to renegotiate trade deals and restore manufacturing jobs. “It’s time for our great industries to come back to America,” the president said from the Oval Office on Monday.

That could be a tall order.

The U.S. long ago lost its lead as the world’s biggest manufacturing power to China, a dominant producer of ships, robots and 5G equipment, according to Deutsche Bank.

THE SPEED READ

• DealsStripe, the payments giant, is said to be weighing another sale of employee shares, this time at a valuation of at least $85 billion. (The Information)

• Elliott Investment Management has reportedly amassed a stake in Phillips 66 worth at least $2.5 billion, and plans to push the oil refiner to improve its operations. (WSJ)Politics, policy and regulation

• Speaker Mike Johnson is said to be seeking support for a new federal budget plan, as House Republicans feud over how many trillions in cuts to include. (Politico)Microsoft is reportedly under investigation by France’s antitrust regulator over whether the tech giant is degrading search results for smaller rivals that use its Bing search engine. (Bloomberg)

• Best of the restWe’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.

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