If this whole little crowd is back together today, it is obviously because Donald Trump is president again, and they all stand to gain from it. What is more surprising is that in just a few months, the war of egos is raging in private over notoriously public matters, which could lead to the biggest conflicts of interest in history…
It was probably one of the most surprising announcements of the end of Trump’s campaign: handing Musk a sort of proto-ministry, with the sole mission of cutting state spending. And the executive order signed at the end of January did not really shed much light on either the outline of the mission or the latitude of DOGE7… which seems unlimited.
Calling the department DOGE is no accident. For years, Musk has made no secret of his obsession with Dogecoin. He propelled it into crypto culture by posting cryptic tweets, mentioning it in interviews and even temporarily replacing the Twitter logo with the famous Shiba Inu. Enough to send the price soaring every time… or crashing. Sometimes he says he wants to send Dogecoin “To The Moon” with SpaceX, with gains that topped 1,500% ($0.52 at the time). Sometimes he declares on Saturday Night Live that it is a “hustle” after all, triggering a 50% drop in a few hours and wiping $20bn off its market value. Enough to raise a few questions, which we will come back to.
So who has Musk brought along on this budget adventure? Unlike traditional ministries or administrations, DOGE works as a parallel cell. You could split DOGE into 3 broad groups:
In the first group we find8 9:
In the second group are little-known names, mostly very young Musk fans. They have been parachuted into the federal administration with unprecedented access to government computer systems. Even though they have no security clearance and have not undergone any background check, as revealed by a letter from the Leadership Conference on Civil and Human Rights, which reveals that none of these people is even directly employed by the government.
Letter from the Leadership Conference on Civil and Human Rights
Finally, there are those who are not directly part of DOGE but actively support it from where they sit:
And you could also add three big Silicon Valley names:
Since its launch on 20 January, DOGE already claims more than $1bn in savings, mainly by cancelling contracts linked to DEI13. A decision that made Democrats jump, but delights Trump supporters. Musk also ended federal subscriptions to the New York Times, an obvious budget priority with anecdotal results.
The way DOGE works is deliberately murky. Its members use White House email addresses, but some also have addresses at several federal agencies. Many simply present themselves as “experts” or “advisers”, with no clear description of their responsibilities.
And yet DOGE has already taken very concrete actions that are already having consequences:
In all, DOGE has reportedly already poked its nose into at least 15 federal agencies, including the Consumer Financial Protection Bureau, the Department of Education, FEMA17 and the Centers for Medicare and Medicaid Services (CMS), among others. The goal is clear: cut spending and eliminate what they see as inefficiency and bureaucracy. All with an obvious link to Musko-Trumpist ideology.
This demolition job has triggered a wave of challenges, with lawsuits filed by public-sector unions and civil rights groups. A federal judge has already temporarily barred DOGE from accessing certain sensitive Treasury data.
But last night (forcing me to rewrite this newsletter yet again 😅), a formal complaint was filed by 26 anonymous plaintiffs, identified as J. Does 1 to 26, employees or contractors of USAID. These officials accuse Musk and his administration of trying to sabotage their work and of breaking federal laws on governance and transparency.
Their complaint rests on several points:
Musk and his lawyers have already denied these accusations before the Maryland court, arguing that DOGE is a budget optimisation body and not a coercive force.
The outcome of this complaint could define the limits of DOGE’s powers and possibly curb its interventions in other federal agencies. But in the meantime, Musk and his team carry on with their crusade, which could still turn out to be strewn with a few pitfalls.
Because Musk deftly navigates conflicts of interest while benefiting directly from the budget cuts imposed by Trump. By drastically cutting the resources of federal regulators, he clears the road for his own companies. It is a bit like putting an arsonist in charge of the national forests.
Take SpaceX 🇺🇸 and the Pentagon. One of DOGE’s missions is to review military spending. An ambitious goal, but with one interesting detail: SpaceX is one of the Pentagon’s biggest contractors, with more than $16bn in recent years. When asked about this blatant conflict of interest, Musk dodged the question.18
It was not him submitting the contracts, he explained, but people at SpaceX… or something like that.
Something like that. An answer that only heightens the irony of the situation: military contracts going to SpaceX are directly overseen by the man who is supposed to be “cutting spending”.
Then there is the dismantling of the CFPB19, the independent agency that oversaw, among other things, the financing of Tesla vehicles. Because like many carmakers, Tesla offers to handle its customers’ car financing directly through Tesla Finance LLC. For that reason, CFPB employees are banned from holding securities in the companies concerned, such as JPMorgan or Ford. A common practice in government, but also in quite a few finance firms, precisely to avoid conflicts of interest. Except that Musk does hold a few Tesla shares at the back of a drawer…
No agency, no complaints. Simple and effective. Kill the dog, and you are rid of the rabies. Tesla will no longer have to worry about regulatory oversight.
Not to mention that the CFPB was also supposed to oversee companies looking to enter digital payments, a sector X is about to move into.
But of course Neuralink and xAI also benefit from deregulation. DOGE plans to cut the budgets of the agencies that monitor brain implants and AI. Here again, the idea is to redraw a framework that suits the ambitions of his companies.
In the same vein, the NLRB20, the agency that regulates working conditions, has seen several of its members fired by Trump, reducing its ability to act. Likewise, the SEC, which was investigating Tesla and X, is being reorganised with pro-business appointments, weakening the regulatory framework even further.
Asked about these issues, Musk has always stayed calm, with the bullshit that has come to define him.
All of their actions are public, he argued, so if anyone spots something along the lines of “Elon, there might be a conflict of interest”, people will say so straight away.
A typical answer, but one that hides the essential: many DOGE decisions are taken in total opacity, and when information comes out, it is often by accident.
Especially as the problem dates back well before his appointment to DOGE. Besides Tesla shareholders, who are starting to wonder whether their high-profile CEO is really looking after their company, Democratic senator Elizabeth Warren raised the alarm last summer with Robyn Denholm, chair of the board21 of Tesla.
In it, she denounced Musk’s blatant conflicts of interest, accusing the board of failing in its fiduciary duties by letting him run Tesla while actively building his other companies such as X Corp., Neuralink, SpaceX and xAI. Which, for their part, are not listed.
More serious still: Warren points to the diversion of critical AI resources: around 12,000 Nvidia H100 chips meant for Tesla were actually sent to X Corp., for a reason we will see later. These ultra-powerful chips were supposed to improve Tesla’s self-driving systems and robotics projects.
In December 2022, Warren had already challenged Tesla over Musk’s conflicts of interest, when he was absorbed by his chaotic takeover of Twitter, which we will come back to briefly. In another letter to the board, she accused Musk of diverting his attention from Tesla to manage his new toy, at the expense of shareholders. She also raised the question of financial and human resources: was Tesla indirectly funding Twitter?
But all of this came to nothing, and Musk carries on to this day using whatever he can find for his own ends.
Meanwhile, Trump defends his ally, explaining that Musk is a successful guy, which is why they want him doing this, and that they do not want a guy who failed.
Because while on 12 February Musk was in the Oval Office with his son on his shoulders, answering journalists, except the one from AP, banned from the White House for refusing to use the term Gulf of America22, we learnt that SpaceX had just signed a $40M contract with the Pentagon23… to cut spending.
Will the government actually pay less thanks to this contract? No idea, nobody can check. But even if it were true, we are way beyond a simple conflict of interest.
In France, this is the very definition of prise illégale d’intérêts, the criminal offence of an official taking an unlawful interest in a business they oversee.
For years, US intelligence agencies have worried that ByteDance🇨🇳, TikTok’s parent company, could pass data on to the authorities in Beijing. A concern officially denied by TikTok, but enough to put the platform in Congress’s sights.
In April 2024, a bipartisan bill sets an ultimatum: ByteDance must sell its American operations before January 2025, or see TikTok banned outright on American soil. In response, TikTok plays the lobbying card and challenges the law in court, arguing that it violates free speech. But in January 2025, the Supreme Court rejects those arguments and upholds the law.
At midnight on 19 January, TikTok vanishes from the app stores. A lightning ban… that lasts only twelve hours. Because as soon as he is sworn in, Donald Trump signs an executive order delaying enforcement of the law by 75 days. Why? Because a takeover is being negotiated behind the scenes, and Trump wants a say in it.
In fact, when the app comes back to the stores, it thanks Donald Trump by name. Even though the Biden administration had said it would not enforce the ban. And Trump had not yet signed the order. A fine display of allegiance.
This is not the first time TikTok has come within a whisker of falling into the hands of American investors. Back in 2020, Trump had tried to force a sale, citing national security. At the time, Microsoft, Oracle and Walmart had lined up.
Oracle very nearly won, backed by Walmart, in a $12bn deal. But the operation collapses when Beijing changes its rules on technology exports: no way will it sell TikTok’s recommendation algorithm, the heart of the platform’s success. Without the algorithm, buying TikTok is like buying a Ferrari… without the engine.
Since then, Oracle has not let go. Larry Ellison’s company already hosts part of TikTok’s American data on its servers. And today, as Trump revives the sale, he is the one back in the spotlight.
If, for many, the big unknown remains the sale price, for those working on the deal the question is rather: what exactly is for sale?
Potential buyers are under no illusions: the first two assets will be on the table. As for the algorithm, it is unlikely. Beijing has reportedly already locked down its transfer. Without it, TikTok becomes a mere empty container, a shell whose value collapses.
Estimates range between $40bn and $65bn. A colossal price, but one that raises a simple question: who can afford to sign a cheque like that?
For now, nobody. That may be what explains Donald Trump’s idea of imposing a public stake: the American state could take half, guaranteeing political control over the platform. Quite the paradox in free-market America, (almost) co-run by a libertarian.
With the algorithm, the deal could change scale. Some experts reckon that access to the recommendation technology would push the bill up to $150-200bn. Which would make it one of the biggest deals in M&A history.
But nobody seems to believe it.
A big Trump supporter, Larry Ellison looks like the man for the job. He has the advantage of political proximity, but one big problem: raising the money.
Neither Oracle, powerful as it is, nor Ellison can finance such an acquisition alone. His 2020 ally, Walmart, has already jumped ship, put off by the cost of the operation.
As for SoftBank, Masa has been spotted several times in the United States, notably at the White House, sparking rumours of a co-investment. Something a SoftBank executive flatly denied to me, confirming unequivocally that it was for another deal, which we will get to further down.
According to the same source close to the deal, it was in fact Ellison who suggested to Trump the idea of the federal state taking 50% of the capital.
The other big favourite, also anointed by Trump, is of course Musk. According to another player in the deal, Musk was not even aware of it before the president’s announcement. Although he put an end to the rumour a few days later in an interview24, all the players say clearly that he never expressed any wish to buy TikTok.
Officially, Musk does not like stepping into companies at too advanced a stage. X 🇺🇸 was an exception, meant to turn it into a broader platform (including payments). In reality, Musk would not really have the means: to buy the former Twitter 🇺🇸 for $44bn, he had to pledge a pile of Tesla 🇺🇸 shares as collateral.
Part of that $13bn debt, taken on with a consortium led by Morgan Stanley 🇺🇸, was in fact sold recently. $3bn was offloaded, on top of $6.5bn already sold in recent months.25 A way of getting rid of debt that could turn toxic if Musk fell from grace.
Another player is keeping an eye on the affair: Microsoft. In 2020, the company was the first to position itself for a TikTok takeover. At the time, Satya Nadella had dinner after dinner with Donald Trump to convince him to favour his offer. Without anyone really knowing whether it worked.
But the Redmond giant, an outsider on the deal, is still lying in wait. Microsoft has the means to finance the operation alone and could see it as a chance to catch up in social media, after missing the Facebook 🇺🇸/Instagram 🇺🇸 era.
That said: it is getting crowded.
Frank McCourt, the property tycoon, former owner of the Los Angeles Dodgers and current owner of the French football club Olympique de Marseille, is on the case with his project The People’s Bid for TikTok. His idea? Buy TikTok without its algorithm, migrate the structure to a more transparent platform and give users more control over their data. He is backed by Kevin O’Leary, star investor of Shark Tank26, who says he has gathered $20bn in cash for the deal.
Another unexpected suitor: Jimmy “MrBeast” Donaldson. The YouTube star, who has 340M subscribers on the platform and 113M on TikTok 🇨🇳, has said he wants to get involved. In reality, he is the public face of a consortium led by Jesse Tinsley, founder and CEO of Employer.com, which has officially submitted a cash offer.
Meanwhile Steven Mnuchin, Trump’s former Treasury Secretary, is putting together his own group. He was the one who had tried to structure the 2020 takeover around Oracle and Walmart. Today, he is trying to win over investors for a plan in which ByteDance would sell its American operations while keeping a minority stake.
Bobby Kotick, the former CEO of Activision Blizzard, has also expressed interest. At a meeting with Sam Altman, he reportedly discussed a possible joint financing set-up, although his project remains vague.
Finally, Perplexity AI 🇺🇸 has proposed a tie-up with TikTok, in a structure where the American government could own up to 50% of the shares after an IPO at $300bn.
In mid-January, the United States gave TikTok 75 days to get its house in order. The outcome should come in the next few weeks. Trump has put JD Vance in charge of the file, along with Michael Waltz, his National Security Adviser.
If Musk will probably not be part of the TikTok deal, there is another subject on which he remains very active: AI. And his latest moves, along with his past dirty tricks, clearly show that he intends to ramp up. And that he will not let OpenAI get away with anything.
In March 2023, worry about artificial intelligence goes up a notch. A thousand experts sign an open letter calling for a six-month moratorium on research beyond GPT-4, which has just been announced barely a year after the meteoric launch of ChatGPT27. Among the signatories are:
And Elon Musk.
But in July 2023, to everyone’s surprise, Elon Musk announces the creation of xAI within X Corp., a company meant to “understand the true nature of the universe”. Behind that philosophical ambition lies a more pragmatic reality: Musk recruits some of the best talent from DeepMind, OpenAI and Microsoft, and trains his Grok model on 10,000 Nvidia cards acquired at the start of the year via Tesla, as I explained above. In other words, while he was calling for a pause, he was already laying the foundations of a competitor.
The move says a lot about the dynamics of the sector. The AI race will not slow down, whatever the warnings. The ethical debate between philosophers is now an industrial battle, where speed of innovation trumps any consideration of caution.
While telling everyone he does not need funds, Musk files with the SEC to raise $1bn for xAI. For many months, Tesla’s share price has been slowly sliding. The problem is that it is his Tesla shares that secure the loan for the Twitter takeover: too sharp a fall could trigger a liquidation, which would be catastrophic.
That said, as the old line often credited to J. Paul Getty goes:
“If you owe the bank $100, that’s your problem.
If you owe the bank $100 million, that’s the bank’s problem.”
Because Musk’s communication ends up going down badly. Advertisers leave the platform, and Musk, who said he was buying Twitter to defend free speech… threatens to sue them.
But this apparent nonchalance could hide a strategic pivot: X would no longer be so much a social network as one piece of a bigger puzzle, that of his AI empire. Which could also go through his dream of turning it into a super-app that would include payments, like Line or WeChat in Asia.
Except that the fundraise goes badly, and Musk only finds €135M from 4 investors for the first tranche, closed in November 2023, to whom he promised an investment in X Corp. In other words, double exposure to X (formerly Twitter) and xAI (future Grok), plus a right of first refusal on the next round.
Without waiting for it to close, Musk nonetheless has a gigantic data centre built in Tennessee, called Colossus. A project that seems a long way from the calls for caution he was signing a few months earlier.
On its side, OpenAI is also stringing together giant fundraises: the company long ago found a way to make up for the funding Musk cut off. That said, as in the good old days, it remains a complex and divisive subject, still today, as shown by the soap opera of winter 2023.
In November 2023, OpenAI goes through a crisis worthy of Succession. Within a few hours, Altman is abruptly ousted by a board that no longer trusts him. Officially, he was not “consistently candid” with the board. Unofficially, his aggressive commercial approach, his growing influence and his ambitions for rapid expansion worry some of the directors, in particular Ilya Sutskever and Helen Toner, who fear an uncontrolled development of artificial intelligence. Always the same fears, nearly 10 years on.
Brockman storms out in support, but the affair takes an absurd turn when Microsoft, kept in the dark about the scheming, takes the orphan into its own team. Straight after, several key researchers leave the company, and 95% of employees sign a letter demanding Altman’s return, or they will resign en masse.
The weekend that follows becomes a ballet of negotiations and intrigue. The board, under pressure, considers bringing Altman back but drags its feet. Internally, the situation is explosive: employees threaten a mass exodus, and even Sutskever, one of the instigators of the firing, does a U-turn and signs the petition calling for his return. The company wobbles, investors panic, and OpenAI comes close to imploding.
On 22 November, after five days of chaos, the board finally gives in. Altman gets his job back, while his opponents are sidelined.
A new, more accommodating board is set up under Microsoft’s supervision.
The episode loudly illustrates the tension between the idealistic vision of AI controlled by safety-minded researchers and the reality of a market where power belongs to those who fund innovation.
The crisis revived the question of governance. OpenAI has a particularly complex legal structure that reflects precisely those years of debate, through two entities.
What is special about this set-up is that the non-profit entity fully controls the commercial one. It appoints the board and sets the strategic direction, making sure commercial activities stay aligned with the original mission: developing AI that benefits humanity. That control is exercised notably through the profit cap: investors in the LLC cannot hope for returns above 100 times their initial stake.
It is this structure that made it possible to delay the launch of DALL-E 2 by four months to build in safety mechanisms and prevent malicious uses. Several experts and board members forced the decision through, against the advice of Microsoft, which could see Midjourney pulling well ahead.
But it leads to unconventional arrangements. When OpenAI announces a record $6.6bn raise from Microsoft (valuation $157bn) last October, it works like the equivalent of an advance in a record-label contract: until the $13bn invested in recent years is paid back, Microsoft pockets 75% of the profits. The deal even specifies that investors can get their money back if OpenAI does not become a for-profit company within two years. Quite the pressure.
So that is why Altman, with plenty of help from Microsoft, wants to turn OpenAI into a benefit corporation, and therefore a for-profit company. It is this change of status that reportedly pushed several old-timers towards the exit, including Barret Zoph and Bob McGrew, respectively VP and head of research. Leaving Altman and Zaremba as the last founders still on board.
Altman fully owns the path taken. In a recent interview, he insisted that AGI is closer than ever and that it was impossible to remain a simple research lab without sufficient resources. He goes further, claiming that OpenAI was always designed to evolve into a hybrid structure. All the more so because Musk was always in favour of that model back when he was at OpenAI, as this correspondence shows.
Text message from Greg Brockman to Shivon Zilis, a Musk confidante who acted as the link between him and OpenAI
Exchanges between Elon Musk, Greg Brockman and Ilya Sutskever
This conflict obviously goes far beyond Silicon Valley. It raises a fundamental question: who will hold power over the artificial intelligence of the future? A company? A country? A handful of individuals?
Musk and Altman are no longer just rivals in this battle. They have become the symbols of a much wider confrontation, whose outcome may well decide the very future of technology. And to be a little grandiloquent: perhaps even of humanity.
This switch to a for-profit company is not to everyone’s taste. Because if there is money to be made, investors will come. And for 2 years now, all of Silicon Valley has been focused on AI, and almost all the big rounds above €100M go only to AI startups. Same for listed companies, which need to make announcements so as not to sink.
Among them, Meta. Like Musk, Zuckerberg made a huge Trumpist turn during the second half of 2024, morphing into a near-masculinist in his communications. While he has often been mocked for his recent failures, on the metaverse or VR for example, Zuckerberg knows it is better to spend a lot for nothing than to miss the boat while sitting on a lot of cash. He knows he owes his success to his knack for smart acquisitions (Instagram, WhatsApp) or neat copycats of what he could not buy (SnapChat). And that, conversely, those who missed the web 2.0 turn paid dearly for it (Google, Microsoft, notably).
While it was a given that Musk would oppose Altman’s plan, Zuckerberg actively joining in came as a surprise. In a letter to California’s attorney general, Meta urged that OpenAI’s conversion into a for-profit company be blocked, arguing that it would set a dangerous precedent allowing startups to enjoy the tax advantages of non-profit status until the moment they become profitable. An argument that barely hides the strategic stakes: Meta has invested billions in its own AI technology to compete with ChatGPT, while OpenAI is closely tied to its two big rivals, Microsoft and Apple.
If OpenAI’s new business model is valid, Meta argued in substance, non-profit investors would get the same returns as those who invest conventionally in for-profit companies, while also enjoying tax deductions granted by the government.
Tension rises another notch in autumn 2024. OpenAI is looking for $6.6bn, and everyone wants in, notably the two early backers Thrive Capital and Tiger Global. OpenAI then imposes a condition: a formal ban on funding any of 5 competitors28, which gives a map of the field:
A bit surprising, since SoftBank and Fidelity are already in several of the others.
In any case, a few weeks later, it is xAI that announces it has closed a $6bn round, as if replying to OpenAI. But at a $50bn valuation, a far cry from its best enemy’s $157bn. The investors include Valor, Vy, Horowitz, Fidelity and the Saudi prince Alwaleed Bin Talal. Enough to double Colossus’s computing power.
Enough, too, to renew the unexpected alliance between Musk and Zuckerberg, who had nonetheless challenged each other to a cage fight last summer, showing how far the AI battle is redrawing the front lines in Silicon Valley.
The war escalates again in mid-November, when Musk directly accuses OpenAI and Microsoft of anti-competitive collusion to dominate AI development.
He uses OpenAI’s ban on funding xAI as an argument. More personally, he accuses Altman of rampant nepotism in his dealings with other companies and of orchestrating a de facto merger with Microsoft. An expression repeated seven times in the complaint.
A battle that now goes far beyond technology to become eminently political. And… once again personal.
Because, sorry, I am going to digress again, but Musk’s complaint names OpenAI, obviously, Microsoft, as a shareholder, and Reid Hoffman.
This American billionaire29 is co-founder of Inflection AI, a ChatGPT-style conversational agent co-developed with Nvidia, which raised $1.3bn (valuation $4bn) in mid-202330 before joining Microsoft’s AI division a year later, in a quasi-acquisition31. Behind Inflection AI are Mustafa Suleyman and Karén Simonyan, who co-founded DeepMind and left it after its purchase by Google, and therefore Hoffman. A science buff who sits on the board of Zynga and Mozilla32, a Democrat and a critic of Trump, he is best known for co-founding LinkedIn in 2003. CEO until 2007, he eventually leaves the board a few years later.
But the story starts long before that. After a stint at Apple working on UX, Hoffman makes his name in tech by founding a dating site that he sells to its competitor, Match. That is how he ends up on the board of Confinity, Peter Thiel’s company, which he eventually joins, and which merges with X to give PayPal etc. That took a while, but we are getting there.
So Hoffman is part of what is known as the PayPal Mafia, with Thiel, but also Max Levchin and David Sacks. Legend has it that the first three voted to fire Musk, but not the last one. Born in South Africa like Musk, conservative like Musk, Sacks is also part of the Trump administration, in charge of crypto as we saw earlier. Like Musk.
According to several people, it was Hoffman who was behind the creation of Open AI. He was the one who put Altman and Musk in touch through the YC partner, and who also contacted Demis Hassabis, Mustafa Suleyman, Yann LeCun and Jeff Dean. He was the one who wanted a project “for humanity”. Because for him, it was above all a philanthropic project. A definition he explained at length in 2017 in The Atlantic33.
It is a good thing, Hoffman explained, to have people who know how to use capital and leverage effective methods put them to social and philanthropic ends; you just have to watch out for politics and abuse.
But Hoffman is no fool, and knows money is needed. He was reportedly behind the first contacts with Tiger Global, which he calls the “ultimate prophet maker”, so that it would come in from OpenAI’s seed round.
Enough to land Hoffman on Elon Musk’s list of enemies.
The latest Muskism to date, on 10 February. And I admit that, personally, it caused quite a mess, because I have been writing this newsletter for several weeks, and these last few days have been very busy.
Musk announces he is putting $97.4bn on the table to buy the OpenAI non-profit. It is his lawyer, Marc Toberoff, who does the rounds of the newsrooms to defend the offer he sent himself.
It is time, the offer’s backers said in substance, for OpenAI to go back to being the open-source, safety-focused force it once was.
The offer sent by Marc Toberoff to Bret Taylor, Sam Altman, Adam D’Angelo, Sue Desmond-Hellman and Zico Kolter, the board of OpenAI
The announcement is a huge thunderclap, at a time when OpenAI’s governance is still fragile and the company is raising $40bn in a round led by Softbank at a $300bn valuation.
Altman’s reply was not long in coming… on X:
“no thank you but we will buy twitter for $9.74 billion if you want”
Oopsie.
Musk’s plans are clear, on paper:
In reality, it may seem a little surprising. Sure, X’s algorithm has been open source since the takeover, which has in no way stopped it from being heavily manipulated, to promote himself, for example. But above all, Musk has never created a foundation, and has never wanted to use a non-commercial structure for any of his companies, which he claims to have created for the good of humanity. While you can understand that Tesla has commercial goals, it could very well have been the case for xAI or X. And then, as we have seen, he always supported OpenAI’s move to a for-profit company… if only because it would have made him a lot of money too.
Obviously, Musk’s offer is anything but innocent. The message is that he wants to bring OpenAI back to its roots: an open-source organisation, focused on safety and free from Microsoft’s commercial interests. But he is of course fully aware of the critical phase (governance + fundraise) and is pouring oil onto a pyre where you have to wonder who will end up burning.
By publicly announcing $97.4bn, he sets a floor price for the valuation of OpenAI’s assets and puts enormous pressure on Altman and his investors. If SoftBank and the others want to close their deal, they now have to justify a value that takes Musk’s offer into account, and potentially put more money on the table.
At the same time, this show of force creates an extra regulatory risk. With such a sum at stake, any conversion of OpenAI into a for-profit company will be closely examined, notably by the American authorities (vaguely under influence), which could judge the operation too favourable to OpenAI’s executives and shareholders. Musk thus makes sure that Altman’s transition to a commercial structure will not go smoothly.
It is obvious that Musk’s offer is not serious. And that its only aim is to annoy the hell out of Altman by making him lose time and possibly money. While hoping it all works in xAI’s favour.
But what remains interesting is the list of investors said to have backed the offer of nearly $100bn (in cash, as it specifies), who are not VC regulars but rather people close to Musk:
More surprising: the presence of Ari Emanuel, the all-powerful CEO of Endeavor, who now controls a large part of Hollywood after getting his hands on IMG, WME, ICM and several top talent agencies. His empire does not stop there: he owns or manages the rights to some of the biggest competitions in the world (ATP, FIFA, Olympics, Moto GP, NBA, NFL, Nascar, Premier League, UFC, Miss Universe, Le Mans). In a very Democratic Hollywood, seeing the man who pressured brands to drop Kanye West and who backed Hillary Clinton end up alongside Musk came as a surprise. Or not.
The signatories of the offer
Note: a few hours after I had finished this newsletter, Musk finally announced that he had withdrawn his offer.
Because between his career in property and his career in politics, Trump was also a TV star, a side of him French audiences saw little of. Between 2004 and 2015 he appears in The Apprentice, where he becomes famous for his catchphrase You’re Fired!. At that time, Ari Emanuel (who inspired the character of Ari Gold in Entourage, for those in the know) becomes Trump’s agent, and his friend. It is also Ari Emanuel who buys the rights to Miss Universe and Miss USA from Trump when NBC broke off the contract after he declared that many Mexican immigrants were criminals and rapists. Trump took the opportunity to buy the remaining 51% of the Miss Universe Organization and sold the lot to WME/IMG for an estimated $100M+.
As a side note, it was during The Apprentice that Trump launched his presidential campaign in 2015, using the show for storytelling. And it is precisely that switch that reportedly inspired Volodymyr Zelensky to produce Servant of the People, with the aim of running for president himself.
The same year, one of Endeavor’s publishers signs Hillbilly Elegy, one of the literary hits of 2016, written by a certain… JD Vance.
While he has always said he is not active alongside Trump, Axios revealed in its leak of 201934 documents that Emanuel had been approached for a job in the administration and that the past of his brother Rahm, then Democratic mayor of Chicago, had been dug into. Still, a source inside Endeavor confirms to me that he was the one who introduced UFC commentator Joe Rogan, and above all the very powerful UFC boss Dana White, to Trump. He is also the one who got White onto the board of Meta.
The same source explains that Musk and Emanuel have known each other for 10 years. At the time, the entrepreneur is about to divorce for the 3rd time. The 2nd from Talulah Riley. But on 2 May 2016, a few months before the divorce is made official, while the couple no longer live together, Elon Musk meets Amber Heard at the Met Gala. With his mother, Musk spots the actress seated at a table in front of him, wearing a magnificent champagne dress by Ralph Lauren.
Married to Johnny Depp for a few years, the actress has come alone. Musk learns that same evening that she too is preparing her divorce from the Pirates of the Caribbean star… but that he does not know it yet. It is at that time that Heard starts speaking about the violence she allegedly suffered at Depp’s hands.
The explosive situation quickly reaches Emanuel’s ears. At the time, Heard is represented by Christian Carino, who mainly handles music at CAA, a subsidiary of the group, since sold. A friend of the couple, he also sometimes represents Depp, for his music. In reality, Depp’s career has been managed by Tracey Jacobs of UTA since 1988, who reportedly negotiated more than $650M in contracts for him in total. A role Carino covets, and he would play a strange game for years, but hey, that is not what we are here to talk about.
In any case, once the relationship is out in the open, Johnny Depp holds a mortal grudge against Elon Musk, the relationship ends with a bang in 2018, Musk is subpoenaed in the Heard vs. Depp trial, but thanks to Ari Emanuel’s intervention, he manages to stay well clear of it all.
Still, the two have stayed close, to the point of going on holiday together35. And since Musk bought Twitter, Emanuel has always pushed his clients to use the platform. While the news that Emanuel offered to run Twitter for Musk for $100M (he has a base salary of around $20M a year, and receives several hundred million in shares every year at Endeavor) leaked36 as a joke, the Endeavor boss would have loved to play a leading role in the social platform.
In reality, Musk’s offer for OpenAI has no chance of succeeding [Note one minute before sending: the board has just announced its official refusal]. First, because the VCs would have to agree to sell for $100bn what they valued at $250bn a few months ago, in a booming market. And above all because, for once, Musk has enemies far sturdier than him in his way: Microsoft and Altman.
According to a French VC who invests internationally, it could even turn out to be very harmful for Musk. Because sure, it lets him exist and show the general public that he has the balls, but:
could well end up weakening him over time. Especially as, facing him, the others seem to be closing ranks.
Especially since he is not done making enemies.
On 21 January 2025 at the White House, Trump unveils the Stargate project. Billed as the biggest artificial intelligence infrastructure project in history, Stargate aims to invest up to $500bn in AI infrastructure in the US over the next four years.
At his side, Sam Altman, Larry Ellison and Masayoshi Son (with the ghost of Elon Musk lurking) announce the main partners:
While the last one is less well known, its parent company Mubadala is one of the biggest private equity funds in the world. And among MGX’s main investors are BlackRock 🇺🇸… and Microsoft. The fund is targeting AUM38 of $100bn within two years39.
Alongside the main companies, there are also technology partners:
And it is Masa himself who will chair the project, whose initial investment is $100bn, the $500bn being a four-year projection.
This colossal sum is meant for building next-generation data centres and putting in place the energy infrastructure to power them.
The first flagship site is announced in Abilene, Texas. Construction has in fact been under way since June 2023, led by Crusoe and financed to the tune of $3.4bn by Blue Owl. Oracle is also investing $7bn in chips there, which will be made available to Microsoft to meet OpenAI’s needs.
Some twenty data centres will follow, each covering around 500,000 sq ft. Trump talks of hundreds of thousands of jobs and of reindustrialising the country.
Ellison talks of a cancer vaccine in 48 hours. No less.
Huge as the promise is, it does not escape criticism. Elon Musk, him again, quickly cast doubt on the project’s financial solidity, claiming that SoftBank had not secured the announced funds. According to him, the Japanese company has less than $10bn in actual financing. Sam Altman immediately rebutted the claim, inviting him to come and visit the sites already under construction.
But if Musk is so worked up, it is because Stargate is a project that is… exclusively OpenAI. Contrary to what was first announced, the project is meant solely for OpenAI’s needs. It will receive no direct government funding and is not aiming to become an infrastructure provider for other companies.
Analysts, for their part, remain cautious. SoftBank has around $30bn in capital, which means it would need to raise an extra $470bn. By comparison, Microsoft, one of the biggest companies in the world with a market value of $3.3tn, has planned only $80bn of AI investment this year. This week, Softbank also announced it was looking to raise $50bn in bonds, which tends to prove Musk was rather right: the money is not there yet.
As for experts and engineers, they raise another challenge: energy. Many point to the crucial need for additional energy infrastructure and new storage technologies. OpenAI is therefore exploring various options: solar via SB Energy (a SoftBank subsidiary), nuclear with Oklo’s modular reactors, or fusion with Helion, two companies in which Sam Altman has invested directly.
Still, announcing Stargate a few days after Trump’s inauguration, right after blowing up the regulatory guardrails put in place by Biden, sends quite a signal.
Even if DeepSeek has since come along to shake the tree. And, to everyone’s surprise… so has Emmanuel Macron.
Just 15 days later, France hosts the AI Action Summit in Paris. On the eve of the opening, Macron announced €109bn of private investment in AI over the coming years, with money coming notably from the United Arab Emirates (€50bn), Canada (€20bn via Brookfield 🇨🇦), and from several European and American players. Plus a €10bn pot from Bpifrance 🇫🇷, France’s public investment bank.
The money will mostly go to building data centres, headlined by the biggest data centre in Europe, financed by the UAE, and another project in Cambrai, in northern France, led by Brookfield 🇨🇦. Mistral AI 🇫🇷, the French AI champion, will invest several billion euros in a dedicated cluster in the Essonne, south of Paris.
At the same time, France is betting on a network of 35 “ready-to-use” sites to host this infrastructure. These plots, totalling around 1,200 hectares, are mostly located in the regions:
These sites have easy access to the power grid via EDF 🇫🇷 and RTE 🇫🇷, France’s state-owned power company and its grid operator, allowing AI infrastructure to be developed faster. RTE has in fact just announced this week a colossal €100bn plan over 15 years to renovate its network.
Admittedly, several of these announcements were already known, and the €109bn figure lumps together quite a few different things. But unlike Stargate:
Although these announcements show a desire to compete with the United States, they inevitably also raise questions about France’s dependence on foreign investors to finance its strategic infrastructure. Take Mistral AI 🇫🇷: it was created by three French founders and counts a few angels among its shareholders, notably the founders of the French health insurance startup Alan 🇫🇷 and former French digital minister Cédric O, yet its money is mostly foreign.
The June 2023 seed round (€105M, valuation €240M) saw Lightspeed 🇺🇸 take 44% of the capital, followed by Xavier Niel 🇫🇷, Rodolphe Saadé 🇫🇷, JCDecaux Holding 🇫🇷, Motier Ventures 🇫🇷, La Famiglia 🇮🇹, Headline 🇩🇪, Exor Ventures 🇮🇹, Sofina 🇧🇪, First Minute Capital 🇬🇧, LocalGlobe 🇬🇧, Bpifrance 🇫🇷, Eric Schmidt 🇺🇸, General Catalyst 🇺🇸, Redpoint 🇺🇸, LocalGlobe 🇬🇧, Index Ventures 🇺🇸, Headline 🇺🇸.
In the €385M Series A a few months later (valuation €1.9bn), the founders become minority shareholders, dropping below 45%. Lightspeed 🇺🇸 remains lead, joined by Andreessen Horowitz 🇺🇸. Then come BNP Paribas 🇫🇷, CMA CGM 🇫🇷, Sofina 🇧🇪, Salesforce 🇺🇸, Motier Ventures 🇫🇷, La Famiglia 🇮🇹, General Catalyst 🇺🇸, Emmerson Collective 🇺🇸, Elad Gil 🇺🇸, Conviction VC 🇺🇸, Bpifrance 🇫🇷.
In 2024, Salesforce 🇺🇸, Nvidia 🇺🇸 and Microsoft 🇺🇸 come in through convertible bonds, still at the same valuation.
While it is not really possible to know the share of capital held in France (or Europe) vs. the US, it seems obvious that Mistral AI 🇫🇷 is less and less a French company. Still:
Not so bad after all!
But let’s go back to the US one last time, for the last giant conflict-of-interest problem. Because Elon Musk has always had a problem with rules, especially when they apply to him. And when he has a problem, he does not try to negotiate: he attacks. His latest playground? The SEC, which he and his friend Trump both loathe. While, fundamentally, you can understand free-marketeers wanting to deregulate, the fact that they become both judge and party raises serious questions, especially since Musk has a long history with the regulator.
On 7 August 2018, Musk drops a bombshell on Twitter: he says he is considering taking Tesla private at $420 a share and that funding is “secured”. The effect is immediate: the stock jumps more than 6%, triggering a speculative frenzy and squeezing the short sellers.
Problem: no concrete financing exists. Musk mentions interest from the Saudi sovereign wealth fund, but no agreement has been signed, no detailed talks have taken place, and no financing mechanism is planned.
At Tesla, it is panic. The board discovers the announcement at the same time as the public, never having been consulted on such an operation. No investment bank has been hired to structure a buyout, and internal teams have to cobble together crisis communications to avoid a collapse in investor confidence.
Very quickly, the SEC is flooded with complaints, forcing it to open an investigation. The regulator accuses Musk of securities fraud, arguing that he manipulated the market by spreading misleading information. It demands that Musk be barred from running any listed company. Musk at first refuses any negotiation, convinced he is right and denouncing persecution by the market authorities.
Example of a complaint received by the SEC
But the pressure mounts: a trial could force him to leave Tesla for good, which his lawyers judge too risky. The settlement is signed in a rush on a Friday evening, after days of tense haggling. And the penalties are severe:
But this penalty has much wider consequences. Tesla risks losing its access to private financing via Regulation D, a mechanism that lets it issue securities without prior registration. The company then asks for a special waiver, arguing that losing it could slow its growth and hurt its shareholders.
In its defence, Tesla tries a poker move: it argues that Musk was speaking as a potential acquirer and not as CEO. In other words, the company is trying to distance itself from its own boss to avoid heavier penalties.
The SEC, for its part, remains sceptical. Some commissioners believe Tesla has not put sufficient controls in place, and that Musk keeps acting as if the rules did not apply to him. Behind the scenes, internal discussions show that several SEC officials are worried about the regulator’s inability to rein him in.
In the end, Tesla gets its waiver, avoiding a major financial crisis.
In 2022, Musk is sued again over this affair, in a trial that sheds light on his sometimes brutal management methods. Among the witnesses called to the stand:
The federal judge confirms that his 2018 statements were reckless and inaccurate.
But the affair could have shaken the Musk empire far more widely. Because of his role as executive and majority shareholder, the SEC action also dragged in SpaceX, Neuralink and The Boring Company, which also nearly lost their access to private financing via Regulation D.
SpaceX was the first to react by asking for a waiver, arguing that Musk played no active role in its fundraising and that stopping it from using this exemption would hurt its development. The company pointed out that it had raised more than $2bn in private financing and that being excluded would force it to completely rethink its growth strategy.
Same problem for Neuralink and The Boring Company, which had to defend their right to use Regulation D despite Musk’s sanction. Their line of defence? Musk is indeed the majority shareholder, but he has no direct operational role in financial management. Both companies insisted on their independence and on the fact that stripping Musk of exemptions should not affect them. Curiously, although each company has its own lawyers… the letters of argument sent to the SEC are all identical, word for word.
In the end, after months of discussions, all the companies obtained waivers. But the affair highlighted a wider problem: the concentration of Musk’s power over several key companies and its potential impact on a whole ecosystem of businesses with every misstep.
And that is something the shareholders of Tesla, a listed company, have understood very well.
The next episode takes place in 2019. Musk announces that Tesla will produce 500,000 cars that year. In reality, Tesla barely reaches 367,000 units. He also announces some very surprising figures on solar panel installations.
Several journalists then start looking into it, and force the SEC to react. Again.
The SEC asks a judge to sanction Musk for breaching the 2018 settlement. After several months of arm-wrestling, a new agreement is reached, spelling out exactly which subjects Musk needs approval on before tweeting.
But in 2020, he does it again: he blurts out that Tesla’s share price is “too high”. The result? The stock plunges.
On 21 February 2021, commissioner Hester M. Peirce, appointed to the SEC by Trump in 2018, shares an alert received a few hours earlier, forcing the regulator to launch yet another investigation. The various exchanges show that the commissioners are thoroughly annoyed at the impunity surrounding Musk. All the more so as complaints pile up accusing the SEC of letting Musk manipulate the market at will via Twitter, without reacting.
A complaint is filed, but a judge blocks the proceedings. A few months later, thanks to a Freedom of Information Act (FOIA) request, it emerges that the SEC had concluded that Musk had breached his settlement at least twice:
And so what?
Even after the settlement with the SEC, Musk is not done with the regulator. He still refuses the idea that his tweets must be approved, and keeps publicly attacking the SEC, going as far as nicknaming it the “Shortseller Enrichment Commission”.
In 2023, he takes his case to the US Supreme Court to challenge the settlement he had signed with the SEC. He accuses the agency of violating his right to free speech and argues that the requirement to pre-approve his tweets is an unconstitutional condition.
His arguments before the Supreme Court are that:
The Supreme Court would reject the petition in April 202440.
It is hard to get more Muskesque than the Twitter takeover, but we are not going to retell the whole story, which could fill a newsletter of its own… (And this one is already long enough)
In March 2022, Musk starts buying shares in the social network, then listed. He quickly crosses 5% of the capital, but fails to disclose it within the legal deadlines, delaying the information by several weeks. This manoeuvre lets him build up even more shares at a low price before the market reacts to his growing stake. Which immediately pushes the share price up.
The SEC, which does not appreciate people playing with market transparency rules, opens an investigation. Failing to get answers, it ends up taking Musk to court in October 2023 to force him to testify.
To this day, the SEC is still trying to understand the exact conditions of this takeover, notably what led Musk to delay disclosing his stake (well, it is pretending to wonder, everyone will have figured it out).
The case has not yet been tried.
If there is one sector Musk loves as much as rockets, it is crypto. And if there is one crypto he adores, it is Dogecoin (DOGE).
Since 2019, he has piled up tweets and references to this meme-inspired token, triggering spectacular spikes in its price. In 2021, after a series of tweets, DOGE soars 1,500% in a year.
Musk goes even further:
All this while wallets that seem linked to him show activity at those very moments, as I discussed here (in French).
Investors, furious at having lost billions, accuse him of a pump & dump41. They claim $258bn in damages, arguing that Musk knew the currency had no intrinsic value but promoted it anyway to his millions of followers.
On 29 August 2024, the American courts throw out their lawsuit, ruling that Musk’s statements were aspirational rather than factual, and that no reasonable investor could have relied on them. The court also dismisses the pump & dump accusation, explaining that a deliberate intent to manipulate could not be proven.
A few weeks later, he announced the creation of his ministry, which is therefore named… DOGE. Which once again sent the price jumping (it has dropped a fair bit since).