👉 Background: OpenAI is the research lab behind the AI chatbot ChatGPT. It was initially founded as a non-profit research lab by Elon Musk and Sam Altman. In 2019, Musk left OpenAI and Altman created a ‘capped-profit’ subsidiary - which allowed OpenAI to raise capital from external investors.

‍👉 What happened: This has turned out to be an all-out-war between Musk and Altman. Elon Musk believes OpenAI has violated the company’s founding mission - particularly asOpenAI is working on a plan to restructure its core business into a for-profit benefit corporation. Now, Musk and a group of investors have put a $97.4 billion USD offer to OpenAI - the non-profit organisation.

‍👉 What else: Just as this offer sent the internet into a spin, OpenAI CEO Sam Altman responded on X: "No thank you but we will buy twitter for $9.74 billion if you want.". Just a reminder, Elon Musk acquired X for $44 billion in 2022. And while this might look like just another tech-bro feud, it actually highlights the challenge of scaling non-profit tech businesses.

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What's the key learning?

💡Balancing mission and money is one of the trickiest challenges for fast-growing companies.

💡Multiple well known tech companies started out as mission-driven-non-profits, but later shifted to for-profit models in order to scale their business. This can create significant tension between employees, company executives and financial backers.

💡OpenAI ain’t the first company to face this non-profit vs profit conundrum:

• Mozilla, the web browser started as a non-profit initiative but then it created a for-profit subsidiary called Mozilla Corporation to compete better with Google Chrome and Microsoft Edge.
• DeepMind, the AI research lab that was originally focused on ethical AI development was acquired by Google for $400 million USD in 2014.