Global AI race is on, world leaders say at Paris summit

At this week’s Artificial Intelligence Action Summit in Paris, world leaders and technologists gathered to discuss the rapidly evolving field of generative artificial intelligence. Many are eager to join the global AI race, while others are proceeding with caution. Tina Trinh reports.

Трамп назвав «помилкою» виключення РФ із «Групи семи»

Американський лідер 12 лютого провів телефонну розмову з президентом Росії Володимиром Путіним, після чого оголосив, що домовився про початок переговорів щодо завершення російсько-української війни

Chinese apps face scrutiny in US but users keep scrolling 

Seoul — As a high school junior in the Maryland suburbs of Washington, Daneel Kutsenko never gave much thought to China.

Last month, though, as the U.S. government prepared to ban TikTok – citing national security concerns about its Chinese ownership – Kutsenko downloaded RedNote, another Chinese video-sharing app, which he felt gave him a new perspective on China.

“It just seems like people who live their life and have fun,” Kutsenko told VOA of RedNote, which reportedly attracted hundreds of thousands of U.S. users in the leadup to the now-paused TikTok ban.

Kutsenko’s move is part of a larger trend. Even as U.S. policymakers grow louder in their warnings about Chinese-owned apps, they have become a central part of American life.

TikTok, owned by China’s ByteDance, boasts 170 million U.S. users. China’s AI chatbot DeepSeek surged to the top of Apple’s App Store rankings, including those in the United States, for several days after its release last month.

Another major shift has come in online shopping, where Americans are flocking to digital Chinese marketplaces such as Temu and Shein in search of ultra-low prices on clothes, home goods, and other items.

According to a 2024 survey by Omnisend, an e-commerce marketing company, 70% of Americans shopped on Chinese platforms during the past year, with 20% doing so at least once a week.

Multifaceted threat

U.S. officials warn that Chinese apps pose a broad range of threats – whether to national security, privacy, human rights, or the economy.

TikTok has been the biggest target. Members of Congress attempting to ban the app cited concerns that China’s government could use TikTok as an intelligence-gathering tool or manipulate its algorithms to push narratives favorable to Beijing.

Meanwhile, Chinese commerce apps face scrutiny for their rock-bottom prices, which raise concerns about ethical sourcing and potential links to forced labor, Sari Arho Havrén, an associate fellow at the Royal United Services Institute, a London-based research organization, said in an email conversation with VOA.

“It raises questions of how sustainably these products are made,” Havrén, who focuses on China’s foreign policy and great power competition, said. Moreover, he said, “the pricing simply kills local manufacturers and businesses.”

Many U.S. policymakers also warn Chinese apps pose greater privacy risks, since Chinese law requires companies to share data with the government on request.

‘Curiosity and defiance’

Still, a growing number of Americans appear unfazed. Many young people in particular seem to shrug off the privacy concerns, arguing that their personal data is already widely exposed.

“They could get all the data they want. And anyway, I’m 16 – what are they going to find? Oh my gosh, he goes to school? There’s not much,” Kutsenko said.

Ivy Yang, an expert on U.S.-China digital interaction, told VOA many young Americans also find it unlikely that they would ever be caught up in a Chinese national security investigation.

“What they’re chasing is a dopamine peak. They’re not thinking about whether or not the dance videos or the cat tax pictures they swipe on RedNote are going to be a national security threat,” Yang, who founded the New York-based consulting company Wavelet Strategy, said.

Yang said the TikTok ban backlash and surge in RedNote downloads may reflect a shift in how young Americans see China – not just as a geopolitical rival, but as a source of apps they use in daily life.

She also attributes their skepticism to a broader cultural mindset – one shaped by a mix of curiosity, defiance, and a growing distrust of institutions, including conventional media.

Jeremy Goldkorn, a longtime analyst of U.S.-China digital trends and an editorial fellow at the online magazine ChinaFile, said growing disillusionment with America’s political turmoil and economic uncertainty has intensified these shifts.

“It makes it much more difficult for, particularly, young people to get worked up about what China’s doing when they feel so horrified about their own country,” Goldkorn said during a recent episode of the Sinica podcast, which focuses on current affairs in China.

Polling reflects this divide. A 2024 Pew survey found 81% of Americans view China unfavorably, but younger adults are less critical – only 27% of those under 30 have strongly negative views, compared to 61% of those 65 and older.

Digital barrier

While Chinese apps are expanding in the United States, in many ways the digital divide remains as impenetrable as ever.

China blocks nearly all major Western platforms and tightly controls its own apps, while the U.S. weighs new restrictions on Chinese tech.

Though President Donald Trump paused the TikTok ban, his administration has signaled broader efforts to curb China’s tech influence.

Trump officials have hinted they could take steps to regulate DeepSeek, the Chinese digital chatbot.

The Trump administration also recently signaled it intends to close a trade loophole that lets Chinese retailers bypass import duties and customs checks.

Broader challenges

Even as Washington debates how to handle the rise of Chinese apps, some analysts say the conversation risks obscuring the deeper issue of the broader role of social media itself.

Rogier Creemers, a specialist in digital governance at Leiden University, told VOA that while Chinese apps may raise valid concerns for Western countries, they are just one part of a larger, unaddressed problem.

“There’s a whole range of social ills that emerge from these social media that I think are far more important than anything the Chinese Communist Party could do,” he said, pointing to issues like digital addiction, declining attention spans, and the way social media amplifies misinformation and political unseriousness.

“And that would apply whether these apps are Chinese-owned or American-owned or Tajikistani-owned, as far as I’m concerned,” he added.

The United States, Creemer said, has taken a more hands-off approach to regulating online platforms, in part due to strong free speech protections and pushback by the tech industry.

Apps or influence?

For millions of Americans, the bigger debates about China and digital influence barely register when they open TikTok.

Kutsenko said neither he nor his friends have strong opinions about U.S.-China tensions. They just wanted an alternative to TikTok – one that felt fun, familiar, and easy to use.

It’s a sign that while policymakers see Chinese apps as part of a growing tech rivalry, for many Americans they’re just another way to scroll, shop, and stay entertained, no matter where they come from.

У Молдові слідом за Азербайджаном закриють «Русский дом»

МЗС Молдови ухвалило рішення про односторонню денонсацію молдовсько-російської міжурядової угоди про створення та функціонування культурних центрів

Німеччина передасть Україні близько 100 керованих ракет IRIS-T

«Німеччина продовжуватиме відігравати важливу роль у цій підтримці й оголосила про поставку близько 100 керованих ракет IRIS-T найближчим часом до України»

Очільник Пентагону в Брюсселі розповів, якою США бачать миротворчу місію в Україні

«Якщо ці війська будуть розгорнуті в будь-який момент, вони повинні бути розгорнуті в рамках місії, що не входить до НАТО, і на них не повинна поширюватися стаття 5»

Vance stakes claim to US leadership in AI

U.S. Vice President J.D. Vance on Tuesday vowed that the United States would maintain its leadership position in the development of advanced artificial intelligence and warned leaders of other countries not to adopt regulatory standards that might “kill” the new technology “just as it’s taking off.” 

“The United States of America is the leader in AI, and our administration plans to keep it that way,” Vance told an audience of world leaders at an AI summit in Paris. He said the administration of President Donald Trump “will ensure that the most powerful AI systems are built in the U.S. with American-designed and manufactured chips.” 

Vance said that the U.S. is open to collaboration with its allies. “But,” he said, “to create that kind of trust, we need international regulatory regimes that foster the creation of AI technology rather than strangles it, and we need our European friends in particular to look to this new frontier with optimism rather than trepidation.” 

Regulations criticized 

The vice president criticized the European Union’s regulatory structure, in particular the privacy-focused General Data Protection Regulation and the misinformation-focused Digital Services Act, and he said the Trump administration will not accept foreign governments “tightening the screws on U.S. tech companies with international footprints.” 

Vance also appeared to criticize the effort in Europe to replace power generated by burning fossil fuels with more sustainable sources, saying that countries are “chasing reliable power out of their nations” at a time when AI systems demand ever-greater access to electricity. 

“The AI future is not going to be won by handwringing about safety,” Vance said. “It will be won by building — from reliable power plants to the manufacturing facilities that can produce the chips of the future.” 

While dozens of countries in attendance at the summit signed a joint declaration on “building trustworthy data governance frameworks to encourage development of innovative and privacy-protective AI,” the U.S. and U.K. did not. 

More calls for reduced regulation 

Although not as dismissive of regulations and safety concerns as Vice President Vance, other leaders at the summit appeared to agree that the regulatory burden on companies in the AI field should be lightened. 

French President Emmanuel Macron, the summit’s host, said that while safety concerns are important, Europe also needs to make it easier for AI firms there to move quickly and innovate at the same pace as other countries. 

“At the national and European scale, it is very clear that we have to resynchronize with the rest of the world,” Macron said. 

European Commission President Ursula von der Leyen defended the bloc’s privacy regulations and other standards, pointing out that they are meant to help businesses by creating rules that apply uniformly across all 27 member countries. 

“At the same time, I know that we have to make it easier, and we have to cut red tape — and we will,” von der Leyen said. 

Veiled China comments 

Chinese Vice Premier Zhang Guoqing, who also attended the summit, said Beijing is prepared to work with other countries to develop AI technology, and it is willing to share its discoveries in the field with the aim of creating “a community with a shared future for mankind.” 

In his remarks on Tuesday, Vance did not mention China by name but appeared to warn other nations against engaging in the kind of collaboration that Zhang described. 

Vance spoke of “hostile foreign adversaries” that “have weaponized AI software to rewrite history, surveil users and censor speech” and authoritarian regimes that have “stolen and used AI to strengthen their military intelligence and surveillance capabilities to capture foreign data and create propaganda to undermine other nations national security.” 

Partnering with authoritarian regimes, Vance said, “means chaining your nation to an authoritarian master that seeks to infiltrate, dig in and seize your information infrastructure.” 

The remarks came at a time when the U.S. is taking wide-ranging action to prevent China from gaining access to the most cutting-edge AI technologies. Recent news reports revealing that a seemingly innovative Chinese AI chatbot known as DeepSeek has been collecting user data and storing it on insecure servers in China has led several nations to restrict access to the service. 

On Monday, Chinese Foreign Ministry spokesperson Gou Jiakun said in a press conference: “We take the safety and security of AI seriously, and support entrepreneurial innovation by Chinese companies, thus contributing China’s part to global AI development.” 

“We have helped developing countries enhance capacity building, advocating that AI technologies should be open-sourced and there should be greater accessibility to AI services so that the benefits of AI can be shared by all countries. That said, we are against drawing lines along ideological difference, overstretching the concept of national security, or politicizing trade and tech issues,” Gou said.  

Tech researchers concerned 

Vance’s remarks about excessive AI safety concerns were in sync with actions taken so far by the Trump administration. On the day he took office, President Trump rescinded an executive order signed by his predecessor entitled, “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.” 

Following Vance’s remarks Tuesday, U.S.-based artificial intelligence researchers warned that a world in which the U.S. declines to require companies to adopt AI safety precautions could make collaboration with colleagues in countries with stronger protections difficult. 

“In order to build effective AI, you have to source data globally, so you have more accurate, complete and representative data sets,” Susan Ariel Aaronson told VOA. She is a professor at George Washington University and co-leader of the National Science Foundation’s Trustworthy AI Institute for Law and Society. 

“Many AI researchers believe we’re running out of data,” Aaronson said. “The future for these firms, the future [for these] markets are overseas, and so we need rules to govern how we interact with policymakers and users in those markets.”  

Mona Sloane, a professor at the University of Virginia who leads an AI research lab, told VOA that maintaining access to those data sets is a prevailing concern. 

“If you talk to people in the research community in the United States, those folks are acutely worried about access to data sets, about collaborating [internationally] on AI questions, or using AI in their research,” she said. 

“There will be very severe implications for research in the United States on AI — but also with AI — by getting cut off from these international conversations,” Sloane said. 

Europe announces plans to ease AI regulations in bid to become heavyweight

Europe says it will ease regulations on artificial intelligence at a key AI summit in Paris on Feb. 11, 2025, that brought together the U.S. and other global tech giants and politicians. But some experts see bigger challenges stalling the bloc’s ambitions to be an AI heavyweight, from the need to pool resources to attracting more investment and talent.

After U.S. President Donald Trump’s massive Stargate investment project and China’s DeepSeek startup, Europe wants to get a share of the artificial intelligence pie. Among other announcements at the Paris summit, co-host French President Emmanuel Macron outlined plans for $113 billion in private AI investment.

The two-day summit underscored tensions between fears of too much AI regulation and not enough.

“At this moment, we face the extraordinary prospect of a new Industrial Revolution, one on par with the steam engine or Bessemer steel,” U.S. Vice President JD Vance told summit attendees Tuesday. “But it will never come to pass if overregulation deters innovators from taking the risks necessary to advance the ball.”

Macron, who’s been nicknamed France’s startup president, outlined caveats. He said advancing international governance of AI will enable the consolidation of trust, acceleration and innovation in order to set the rules for AI, which are necessary to move forward.

Currently, Europe’s AI industry lags behind those of the U.S. and China. But the right policies, some experts believe, can help close the gap.

“Europe really has pretty much everything else it needs to lead in AI or other complex technologies,” said Pierre Alexandre Balland, chief data scientist at the Center for European Policy Studies in Brussels. “The talent is absolutely incredible. … [T]he scale of the European economy is also huge … the education system. Essentially, we see a wind of change in the EU really led by France, and Emmanuel Macron is very much behind that.”

Beyond easing EU regulations, Balland sees bigger challenges — such as pooling European research and other resources, calling for investing pension funds to finance AI’s growth, and concentrating on a single AI hub in Europe.

“Paris is absolutely by far the leading AI ecosystem in Europe,” he said.

Alicia Garcia-Herrero, senior fellow at Brussels-based Bruegel policy institute, agreed France is leading the way. She believes Europe should narrow its goals — focusing on areas like AI applications for robotics.

“Can the AI make the EU more competitive? No doubt,” Garcia-Herrero said. “But I think there’s many other issues that need to be solved beyond AI. The most important one is having a single market.”

Paris summit organizers have also pushed for commitments on making AI more ethical, accessible and environmentally sustainable.

ЄСПЛ ухвалив рішення у справі про російський закон про «фейки»

Заявниками стали російські ЗМІ та фізичні особи, які були притягнуті до відповідальності за статтями про так звані фейки про армію та дискредитацію армії

Vance tells Europeans that heavy regulation could kill AI 

Paris — U.S. Vice President JD Vance told Europeans on Tuesday their “massive” regulations on artificial intelligence could strangle the technology, and rejected content moderation as “authoritarian censorship.”

The mood on AI has shifted as the technology takes root, from one of concerns around safety to geopolitical competition, as countries jockey to nurture the next big AI giant.

Vance, setting out the Trump administration’s America First agenda, said the United States intended to remain the dominant force in AI and strongly opposed the European Union’s far tougher regulatory approach.

“We believe that excessive regulation of the AI sector could kill a transformative industry,” Vance told an AI summit of CEOs and heads of state in Paris.

“We feel very strongly that AI must remain free from ideological bias and that American AI will not be co-opted into a tool for authoritarian censorship,” he added.

Vance criticized the “massive regulations” created by the EU’s Digital Services Act, as well as Europe’s online privacy rules, known by the acronym GDPR, which he said meant endless legal compliance costs for smaller firms.

“Of course, we want to ensure the internet is a safe place, but it is one thing to prevent a predator from preying on a child on the internet, and it is something quite different to prevent a grown man or woman from accessing an opinion that the government thinks is misinformation,” he said.

European lawmakers last year approved the bloc’s AI Act, the world’s first comprehensive set of rules governing the technology.

Vance is leading the American delegation at the Paris summit.

Vance also appeared to take aim at China at a delicate moment for the U.S. technology sector.

Last month, Chinese startup DeepSeek freely distributed a powerful AI reasoning model that some said challenged U.S. technology leadership. It sent shares of American chip designer Nvidia down 17%.

“From CCTV to 5G equipment, we’re all familiar with cheap tech in the marketplace that’s been heavily subsidized and exported by authoritarian regimes,” Vance said.

But he said that “partnering with them means chaining your nation to an authoritarian master that seeks to infiltrate, dig in and seize your information infrastructure. Should a deal seem too good to be true? Just remember the old adage that we learned in Silicon Valley: if you aren’t paying for the product, you are the product.”

Vance did not mention DeepSeek by name. There has been no evidence of information being able to surreptitiously flow through the startup’s technology to China’s government, and the underlying code is freely available to use and view. However, some government organizations have reportedly banned DeepSeek’s use.

Speaking after Vance, French President Emmanuel Macron said that he was fully in favor of trimming red tape, but he stressed that regulation was still needed to ensure trust in AI, or people would end up rejecting it. “We need a trustworthy AI,” he said.

European Commission chief Ursula von der Leyen also said the EU would cut red tape and invest more in AI.

In a bilateral meeting, Vance and von der Leyen were also likely to discuss Trump’s substantial increase of tariffs on steel.

OpenAI CEO Sam Altman was expected to address the summit on Tuesday. A consortium led by Musk said on Monday it had offered $97.4 billion to buy the nonprofit controlling OpenAI.

Altman promptly posted on X: “no thank you but we will buy twitter for $9.74 billion if you want.”

The technology world has closely watched whether the Trump administration will ease recent antitrust enforcement that had seen the U.S. sue or investigate the industry’s biggest players.

Vance said the U.S. would champion American AI — which big players develop — he also said: “Our laws will keep Big Tech, little tech, and all other developers on a level playing field.”

EU’s AI push to get $50 billion boost, EU’s von der Leyen says

PARIS — Europe will invest an additional $51.5 billion to bolster the bloc’s artificial intelligence ambition, European Commission Ursula von der Leyen said on Tuesday.

It will come on top of the European AI Champions Initiative, that has already pledged 150 billion euros from providers, investors and industry, von der Leyen told the Paris AI Summit.

“Thereby we aim to mobilize a total of 200 billion euros for AI investments in Europe,” she said.

Von der Leyen said investments will focus on industrial and mission-critical technologies.

Companies which have signed up to the European AI Champions initiative, spearheaded by investment company General Catalyst, include Airbus, ASML, Siemens, Infineon, Philips, Mistral and Volkswagen.

Трамп підписав укази щодо 25-відсоткових мит на імпорт сталі та алюмінію до США

Президент США Дональд Трамп 10 лютого підписав укази про запровадження 25-відсоткових мит на імпорт сталі та алюмінію з 12 березня.

«Починаючи з 12 березня 2025 року, весь імпорт алюмінієвих виробів і похідних алюмінієвих виробів з Аргентини, Австралії, Канади, Мексики, країн ЄС і Великобританії буде обкладатися додатковим адвалорним тарифом (мито, що нараховується у відсотках до митної вартості товарів та інших предметів, які обкладаються митом – ред)», – йдеться в указі.

Трамп видав окремий указ щодо сталі, в якому йдеться про те, що він поширюватиметься на весь імпорт з тих самих країн, яких торкнулися тарифи на алюміній, а також з Бразилії, Японії та Південної Кореї.

Канада і Мексика є найбільшими імпортерами сталі в США.

Трамп також зазначив, що розгляне можливість запровадження додаткових тарифів на автомобілі, фармацевтичну продукцію та компʼютерні чіпи.

Канадські виробники сталі попередили про «масові» перебої, а Європейська комісія заявила, що «відреагує, щоб захистити інтереси європейського бізнесу, робітників і споживачів від невиправданих заходів».

Президент Франції Емманюель Макрон в інтервʼю, яке вийшло в ефір 9 лютого обіцяв кроки у відповідь і зазначив, що Сполученим Штатам слід зосередити свої зусилля на Китаї.

Також канцлер Німеччини Олаф Шольц заявив напередодні, що Берлін готовий відповісти на можливі торгівельні обмеження, які може запровадити адміністрація Трампа. На передвиборчому заході на півночі Німеччини Шольц зазначив, що «будь-які нові тарифи з боку Трампа будуть зустрінуті заходами у відповідь».

За даними консалтингової компанії Roland Berger, близько 25 відсотків європейського експорту сталі йде до США.

3 лютого Трамп попередив американців, що вони можуть зіткнутися з економічним «болем» через торговельні тарифи, які він оголосив минулими вихідними щодо Канади, Мексики та Китаю – трьох найбільших торгових партнерів США.

Пізніше він заявив, що мита щодо Канади та Мексики будуть призупинені на 30 днів після того, як лідери двох країн, за його словами, пообіцяли посилити заходи на кордоні, щоб зупинити потік мігрантів і наркотиків.

 

France seeks AI boom, urges EU investment in the sector

French President Emmanuel Macron wants Europe to become a leader in the artificial intelligence (AI) sector, he told a global summit of AI and political leaders in Paris Monday where he announced that France’s private sector has invested nearly $113 billion in French AI.

Financial investment is key to achieving the goal of Europe as an AI hub, Macron said in his remarks delivered in English at the Grand Palais.

He said the European bloc would also need to “adopt the Notre Dame strategy,” a reference to the lightning swift rebuilding of France’s famed Notre Dame cathedral in five years after a devastating 2019 fire, the result of simplified regulations and adherence to timelines.

“We showed the rest of the of the world that when we commit to a clear timeline, we can deliver,” the French leader said.

Henna Virkkunen, the European Union’s digital head, indicated that the EU is in agreement with simplifying regulations. The EU approved the AI Act last year, the world’s first extensive set of rules designed to regulate technology.

European countries want to ensure that they have a stake in the tech race against an aggressive U.S. and other emerging challengers. European Commission chief Ursula von der Leyen is scheduled to address the EU’s ability to compete in the tech world Tuesday.

Macron’s announcement that the French private sector will invest heavily in AI “reassured” Clem Delangue, CEO of Hugging Face, a U.S. company with French co-founders that is a hub for open-source AI, that there will be “ambitious” projects in France, according to Reuters.

Sundar Pichai, Google’s head, told the gathering that the shift to AI will be “the biggest of our lifetimes.”

However, such a big shift also comes with problems for the AI community. France had wanted the summit to adopt a non-binding text that AI would be inclusive and sustainable.

“We have the chance to democratize access [to a new technology] from the start,” Pichai told the summit.

Whether the U.S. will agree to that initiative is uncertain, considering the U.S. government’s recent moves to eliminate diversity, equity and inclusion (DEI) initiatives.

U.S. Vice President JD Vance is attending the summit and expected to deliver a speech on Tuesday. Other politicians expected Tuesday at the plenary session are Chinese Vice Premier Zhan Guoqing and Indian Prime Minister Narendra Modi. About 100 politicians are expected.

There are also other considerations with a shift to AI. The World Trade Organization says its calculations indicate that a “near universal adoption of AI … could increase trade by up to 14 percentage points” from what it is now but cautions that global “fragmentation” of regulations on AI technology and data flow could bring about the contraction of both trade and output.

A somewhat frightening side effect of AI technology is that it can replace the need for humans in some sectors.

International Labor Organization leader Gilbert Houngbo told the summit Monday that the jobs that AI can do, such as clerical work, are disproportionately held by women. According to current statistics, that development would likely widen the gender pay gap.

Musk-led group makes $97.4 billion bid for control of OpenAI

A consortium led by Elon Musk said Monday it has offered $97.4 billion to buy the nonprofit that controls OpenAI, another salvo in the billionaire’s fight to block the artificial intelligence startup from transitioning to a for-profit firm.

Musk’s bid is likely to ratchet up longstanding tensions with OpenAI CEO Sam Altman over the future of the startup at the heart of a boom in generative AI technology. Altman on Monday promptly posted on X: “no thank you but we will buy twitter for $9.74 billion if you want.”

Musk cofounded OpenAI with Altman in 2015 as a nonprofit, but left before the company took off. He founded the competing AI startup xAI in 2023.

Musk, the CEO of Tesla and owner of tech and social media company X, is a close ally of President Donald Trump. He spent more than a quarter of a billion dollars to help elect Trump, and leads the Department of Government Efficiency, a new arm of the White House tasked with radically shrinking the federal bureaucracy. Musk recently criticized a $500 billion OpenAI-led project announced by Trump at the White House.

OpenAI is now trying to transition into a for-profit from a nonprofit entity, which it says is required to secure the capital needed for developing the best AI models.

Musk sued Altman and others in August last year, claiming they violated contract provisions by putting profit ahead of the public good in the push to advance AI. In November, he asked a U.S. district judge for a preliminary injunction blocking OpenAI from converting to a for-profit structure.

Musk’s lawsuit against OpenAI and Altman says the founders originally approached him to fund a nonprofit focused on developing AI to benefit humanity, but that it was now focused on making money.

“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was,” Musk said in a statement Monday. “We will make sure that happens.”

Musk and OpenAI backer Microsoft did not immediately respond to requests for comment.

“Musk’s bid puts another wrinkle into OpenAI’s quest to remove the nonprofit’s control over its for-profit entity,” said Rose Chan Loui, executive director of the UCLA Law Center for Philanthropy and Nonprofits.

“This bid sets a marker for the valuation of the nonprofit’s economic interests,” she said. “If OpenAI values the nonprofit’s interests at less than what Musk is offering, then they would have to show why.”

The consortium led by Musk includes his AI startup xAI, Baron Capital Group, Valor Management, Atreides Management, Vy Fund III, Emanuel Capital Management, and Eight Partners.

XAI could merge with OpenAI following a deal, according to The Wall Street Journal which first reported Musk’s offer earlier Monday. XAI recently raised $6 billion from investors at a valuation of $40 billion, sources have told Reuters.

Throwing a wrench

“This (bid) is definitely throwing a wrench in things,” said Jonathan Macey, a Yale Law School professor specializing in corporate governance.

“The nonprofit is supposed to take money to do whatever good deeds, and if OpenAI prefers to sell it to somebody else for less money, it’s a concern for protecting the interests of the beneficiaries of the not-for-profit. If this was a public company, plaintiffs’ lawyers would justifiably be lining up down the block to sue that transaction.”

OpenAI was valued at $157 billion in its last funding round, cementing its status as one of the most valuable private companies in the world. SoftBank Group is in talks to lead a funding round of up to $40 billion in OpenAI at a valuation of $300 billion, including the new funds, Reuters reported in January.

Aside from any antitrust implications, a deal this size would need Musk and his consortium to raise enormous funds.

“Musk’s offer to buy OpenAI’s nonprofit should significantly complicate OpenAI’s current fundraising and the process of converting into a for-profit corporation,” said Gil Luria, analyst at D.A. Davidson.

“The offer seems to be backed by more credible investors … OpenAI may not be able to ignore it. It will be the fiduciary responsibility of OpenAI’s board to decide whether this is a better offer, which could call into question the offer from SoftBank.”

Musk’s stock in Tesla is valued at roughly $165 billion, according to LSEG data, but his leverage with banks is likely to be thin after his $44 billion buyout of the social media platform that was called Twitter in 2022.