The emails tell a different story

Elon Musk is dishonest, says OpenAI


Happy Wednesday. Here’s what we’ve got today…

  • A look at Elon Musk’s involvement with OpenAI and the launch of his own AI startup

  • The deal sheet, plus Cerberus’ investment in Steward Health


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Five OpenAI executives issued a joint statement Tuesday evening disputing Elon Musk’s claims that the startup has abandoned its founding mission to develop safe artificial intelligence as a non-profit entity.

At the company’s launch in 2015, Musk provided around $45 million in early funding. He also co-chaired the startup’s board alongside current CEO Sam Altman.

Last week, Musk sued OpenAI over allegations that the company’s ChatGPT commercial launch and close relationship with Microsoft violated the startup’s founding agreement.

OpenAI’s senior leadership say that’s false and point fingers at Musk over what they’ve portrayed as an attempted power grab in the company’s infancy.

In their telling, Musk and the founding team gradually realized the excessive amount of funding that would be required to reach their goal of artificial general intelligence.

Those requirements far exceed what Musk could personally provide, and both Musk and the founders agreed it would have been impossible to obtain as a non-profit.

In 2017, the startup moved to form a for-profit entity. OpenAI now says Musk leveraged the situation to request a majority stake, board control, and the CEO title for the go-forward company, withholding further funding until his demands were met.

The resulting financial distress forced board member Reid Hoffman to provide an emergency contribution of his own capital to cover salaries and operating expenses.

“We couldn’t agree to terms on a for-profit with Elon because we felt it was against the mission for any individual to have absolute control over OpenAI,” writes the OpenAI group. “He then suggested instead merging OpenAI into Tesla.”

Elon Musk Email

When that suggestion was shot down, Musk departed. “Elon soon chose to leave OpenAI, saying that our probability of success was zero, and that he planned to build an AGI competitor within Tesla.”

A for-profit pivot might create a more sustainable revenue stream over time and would, with the current team, likely bring in a lot of investment. However, building out a product from scratch would steal focus from AI research, it would take a long time and it's unclear if a company could “catch up” to Google scale, and the investors might exert too much pressure in the wrong directions.

The most promising option I can think of, as I mentioned earlier, would be for OpenAI to attach to Tesla as its cash cow. I believe attachments to other large suspects (e.g. Apple? Amazon?) would fail due to an incompatible company DNA.

Using a rocket analogy, Tesla already built the “first stage” of the rocket with the whole supply chain of Model 3 and its onboard computer and a persistent internet connection. The “second stage” would be a full self driving solution based on large-scale neural network training, which OpenAI expertise could significantly help accelerate.

With a functioning full self-driving solution in ~2-3 years we could sell a lot of cars/trucks. If we do this really well, the transportation industry is large enough that we could increase Tesla's market cap to high O(~100K), and use that revenue to fund the AI work at the appropriate scale.

Excerpt from a 2018 email, published yesterday by OpenAI

Strategic Accusations

Musk’s actions seem to support OpenAI’s assertion that his aggression is little more than a thinly veiled attempt to hamstring a competitor.

Last year, the Tesla founder launched his own generative AI chatbot named Grok. Housed within a new startup known as xAI, the offering is a less-sophisticated rival to OpenAI’s ChatGPT service, though with the valuable addition of real-time information (vs. OpenAI’s model training date limit).

xAI is now in discussions with investors to raise up to $1 billion in funding, the first half of which is already committed. In January, Bloomberg reported that the latest negotiations contemplated a valuation of between $15 to $20 billion.

The startup’s fundraising materials feature a slide highlighting the “key attributes that drove OpenAI’s success,” including the now-maligned strategic partnerships and access to capital. The same slide shows a side-by-side comparison with xAI’s similarities.

It’s also not the first time Musk has launched public spats over AI strategy. Earlier this year, he threatened to shift Tesla’s internal AI development outside of the company unless the board raised his equity stake to 25 percent. The additional shares would be worth around $80 billion.

The company is known to be working on AI-led self-driving technology and is developing a range of humanoid robots known as Optimus. “I am uncomfortable growing Tesla to be a leader in A.I. & robotics without having ~25% voting control,” Musk wrote on X. “Enough to be influential, but not so much that I can’t be overturned.”

He added, “Unless that is the case, I would prefer to build products outside of Tesla.”


Liberty Media is in advanced talks to acquire Bridgepoint’s stake in Dorna Sports, a commercial rights-holder for MotoGP and WorldSBK motorcycle racing, in a deal that could be worth €4 billion.

Sentinel Capital Partners agreed to acquire the Industrial Fire Unit of Carrier for $1.43 billion.

Cadence Design Systems has agreed to acquire BETA CAE Systems International AG, a provider of engineering simulation software, for $1.24 billion.

Canal+, a Vivendi-owned French pay-TV company, improved its buyout proposal for South Africa's MultiChoice, now offering $1.8 billion.

Viavi Solutions (Nasdaq: VIAV) has agreed to acquire Spirent Communications (LSE: SPT), a provider of automated network testing and assurance solutions, for £1 billion.

Carlyle is preparing to sell Tokiwa, a beauty and cosmetics manufacturer, in a deal that could be worth around $800 million.

Bregal Milestone acquired a majority stake in Evli Alexander Incentives, a provider of equity plan design and administration services, from Evli Group.

Monomoy Capital Partners acquired Waupaca Foundry, a manufacturer of iron castings, from Proterial.

TPG acquired G&A Partners, a professional employer organization, from The Riverside Company.

Accenture (NYSE: ACN) agreed to acquire Udacity, an online learning platform that had raised funding from backers including Andreessen Horowitz, GV, and Emerson Collective.

Deel agreed to buy South African payments startup PaySpace.

AE Industrial Partners acquired Calca Solutions, a manufacturer of hydrazine-based solutions.

L Catterton acquired a significant stake in AmaWaterways, a luxury river cruise line.

Charlesbank Capital Partners acquired EverDriven Technologies, an alternative student transportation platform, from Palladium Equity Partners.

Add-On Acquisitions

WebMD Health Corp., backed by KKR, acquired Healthwise’s operating assets, a provider of health education and engagement solutions.

Data Clean Corporation, a portfolio company of Angeles Equity Partners, acquired Sealco LLC, a Texas-based provider of critical environment cleaning services.

PGW Auto Glass, a One Equity Partners portfolio company, acquired AutoglassCRM, an industry-specific CRM provider.


CVC Capital Partners is resuming preparations for a potential Amsterdam IPO that could reach a $15 billion valuation.


Tech, Vertical SaaS, & Misc. Enterprise

Perplexity, an AI-based search engine, is close to raising a new round of funding at a valuation of around $1 billion.

RapidSOS, a 911-integrated health and safety tech platform, raised $75 million in new funding from BlackRock.

Taalas, a hardware company developing chips for AI and deep learning workloads, raised $50 million across two rounds led by Quiet Capital and Pierre Lamond.

DTEX, a developer of insider risk management tools, raised $50 million in Series E funding from CapitalG.

Sweet Security, a cloud security runtime-platform, raised $33 million in Series A funding led by Evolution Equity Partners, with participation from Munich Re Ventures and Glilot Capital Partners.

Metaplane, a provider of data observability platforms, raised $13.8 million in Series A funding. Felicis led, with participation from Khosla Ventures, Flybridge, Y Combinator, Stage 2, B37, and SNR.

Multiverse Computing, a provider of quantum and quantum-inspired value-based computing solutions, raised $27 million in new funding led by Columbus Venture Partners, with participation from Quantonation and new backers European Investment Fund, Redstone QAI Quantum Fund, and Indi Partners.

Ema, a developer of enterprise AI task completion solutions, raised $25 million in funding led by Accel, Section 32, and Prosus Ventures, with participation from Wipro Ventures, Venture Highway, AME Cloud, Frontier Ventures, Maum Group, and Firebolt.

Haiper, a video-generative AI tool co-founded by former Google DeepMind engineers, raised $13.8 million in seed funding from Octopus Ventures.

HData, an AI and automation platform for US energy regulatory data, raised $10 million of Series A funding led by Buoyant Ventures, with participation from Victorum Capital, Hyde Park Venture Partners, and Firebrand Ventures.

Sahara, a decentralized knowledge-based AI network, raised a $6 million seed round led by Polychain Capital, with participation from Samsung Next, Matrix Partners, and Motherson Group, among others.

appCD, a developer of Infrastructure from Code (IfC) software, raised $6 million in seed funding from Devo, FireBolt, and Secure Octane.

Media & Consumer

Salla, a Riyadh-based e-commerce enablement platform, raised $130 million in new funding from Investcorp.

Hunch, a social discovery app, raised $23 million in Series A funding led by Alpha Wave and Hashed.

Minimax, a social AI app developing company, raised $600 million at a $2.5 billion valuation led by Alibaba and HongSha, a rebrand of Sequoia Capital China.


Monzo, a UK-based digital banking platform, raised £340 million in Series I funding at a £4 billion post-money valuation. CapitalG led the round, with participation from GV, HongShan Capital, Tencent, and Passion Capital.

Svatantra Microfin, an Indian microfinance startup, raised $230 million in new funding from Advent International.

Axonius, a developer of cybersecurity asset management software, raised $200 million in Series E extension funding at a $2.6 billion valuation from existing investor Stripes, Accel, and Lightspeed Venture Partners.

Argyle, a provider of income and employment verification solutions, raised $30 million in Series C funding from led by Rockefeller Asset Management’s Innovation Fund, with participation from Bain Capital Ventures, SignalFire, and Checkr.

Openprise, a provider of a Revenue Operations (RevOps) data automation platform, raised $25 million in Series B funding led by Morgan Stanley Expansion Capital.

Yuno, a Miami-based payments orchestration platform, raised $25 million from DST Global, Andreessen Horowitz, Tiger Global, Kaszek, and Monashees.

Wagely, a developer of earned wage access software focused on Indonesia and Bangladesh, raised $23 million in combined equity and debt funding led by Capria Ventures.

Baanx, a provider of cryptocurrency payment services, raised $20 million in Series A funding from Ledger, Tezos Foundation, Chiron, and British Business Bank.

Formalize, a developer of compliance solutions, raised €15 million in Series A funding. BlackFin Capital Partners led, with participation from West Hill Capital.

RemotePass, a provider of HR and fintech platform designed to onboard, manage, and pay remote workers, raised $5.5 million in Series A funding led by 212 VC, with participation from Endeavor Catalyst, Khwarizmi Ventures, Oraseya Capital, Flyer One Ventures, Access Bridge Ventures, A15, and Swiss Founders Fund.

Healthcare & Life Sciences

Overjet, an AI-powered dental technology provider, raised $53 million in Series C funding. March Capital led, with participation from General Catalyst, Insight Partners, E14 Fund, Crosslink Capital, Spring Rock Capital, Liquid2 Ventures, Harmonic Growth Partners, and the American Dental Association.

BrainCheck, a developer of digital cognitive assessment platforms, raised $15 million in Series B funding from Next Coast Ventures, S3 Ventures, and UPMC Enterprises.

Limbic, a clinical mental health AI chatbot startup, raised $14 million in Series A funding. Khosla Ventures led, with participation from Gaingels and Illusian.

Roshal Health, a provider of on-demand ultrasound and echocardiogram services, raised $10 million in new funding led by Catalio Capital, with participation from Green Street Impact Partners.

Bone Health Technologies, a medtech focused on bone health solutions, raised $5 million in new funding from Esplanade Ventures, the Berkeley Catalyst Fund, and Terumo Medical.

MDaaS Global, a Nigeria-based diagnostics health tech startup, raised $3 million in new funding led by Aruwa Capital and Newton Partners, with participation from Ventures Platform.

Industrials, Greentech, & Other

IM Motors, a Chinese smart electric vehicle automaker, raised over $1.1 billion in Series B funding from Bank of China’s BOC Financial Asset Investment, CATL, Momenta, QingTao Energy, and SAIC.

Sunfire, a German developer of high-temperature solid-oxide electrolyzer technology, raised €500 million ($550 million) via a combination of equity, debt, and grants, with equity coming from LGT Private Banking, GIC, Ahren Innovation Capital, Carbon Equity, Lightrock, Planet First Partners, Carbon Direct Capital, Amazon's Climate Pledge Fund, and Blue Earth Capital.

Cyclize, a German climate tech startup, raised €5 million in seed funding. UVC Partners led the round, with participation from High-Tech Gründerfonds, Aurum Impact, UnternehmerTUM, and Dr. Klaus Schäfer.

Atmio, a climate tech startup focused on methane emissions, raised €1.3 million in pre-seed funding from HCVC, Robin Capital, and Nucleus Capital.


Andreessen Horowitz is nearing a $7 billion close on its latest fund, per Axios.

Spark Capital raised a combined $2.3 billion for its eighth venture fund and fifth growth fund.

EQT raised $3.3 billion for its latest impact fund.

Riverarch Equity Partners raised $1 billion for its latest buyout fund.

Capitol Meridian Partners raised $900 million for its latest buyout fund focused on government contractors, aerospace, and defense.

Team8 raised a combined $500 million across three early-stage funds.

Commerce Ventures raised $150 million for its fifth retail-focused fund.

Silas Capital raised $150 million for a new consumer-focused growth fund.

Fathom Fund raised a $100 million debut fund focused on early-stage deep tech.


1. Scrutiny over Cerberus’ involvement with health system Steward.

• Axios’ Dan Primack examines the aftermath of Cerberus’ investment and the system’s current struggles. — Axios


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