Elon Musk's $97B OpenAI Bid A 'Distraction' From Tesla's Challenges, Says Analyst As TSLA Stock Set For Sixth Consecutive Drop

Analysts at Oppenheimer said in a research note on Tuesday that billionaire Elon Musk‘s recent bid for ChatGPT parent OpenAI is a distraction from his EV company Tesla‘s TSLA challenges.

What Happened: Musk’s bid for OpenAI is a discount to the AI company’s Oct. 2024 capital raise and unlikely to lead to any discussion, the analysts said, as reported by Markets Insider.

Earlier this week, it was reported that Musk, along with a group of investors, offered to buy the nonprofit that controls OpenAI for $97.4 billion. OpenAI CEO Sam Altman, however, refused the offer and wrote in a post on X, “no thank you but we will buy twitter for $9.74 billion if you want.” OpenAI was valued at $157 billion in its last funding round.

Musk’s Tesla, meanwhile, is faced with increased competition in the field of electric vehicles and the CEO’s political activity also risks alienating consumers and employees, Oppenheimer reportedly said, while noting the drop in Tesla registrations in the democratic state of California in January.

The firm, however, maintains a “perform” rating on Tesla shares.

Why It Matters: Tesla stock has been on a downward slide for the past five consecutive days. The stock, in fact, is down 18.6% over the past month, reversing some of the gains made after Donald Trump was elected President in November. Musk’s proximity to Trump then spurred investor optimism for regulatory support to the CEO’s vision of deploying autonomous vehicles, driving the stock up.

According to The Future Fund Managing Director Gary Black, investor worries about Musk-headed Department of Government Efficiency, Open AI, first quarter volumes, and commoditization of autonomy all aided the drop in share value over the past few days.

Black maintains a $380 price target on Tesla. Shares of the EV giant closed down 6.3% at $328.5 on Tuesday.

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