Elon Musk Says 'OpenAI Is Evil' After ChatGPT-Parent Reportedly Asked Investors Not To Invest In Rivals, Including xAI

Tesla and SpaceX CEO Elon Musk has accused OpenAI of unfair funding practices after a report suggested that the AI startup has been discouraging investors from backing rival startups, including xAI.

What Happened: On Wednesday, OpenAI announced that it had completed its latest fundraising at a staggering $150 billion valuation.

During the negotiations, OpenAI insisted on an exclusive funding arrangement, reported the Financial Times, citing three people with knowledge of the matter.

This indicates that ChatGPT-maker doesn’t want investors to support rival startups such as Anthropic and Musk’s xAI. Naturally, this move has intensified existing tensions with Musk, who is currently suing OpenAI.

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When the news reached Musk on X, formerly Twitter, the Tesla CEO, who co-founded OpenAI in 2015 but stepped down three years later, said, “OpenAI is evil.”

OpenAI is evil

— Elon Musk (@elonmusk) October 2, 2024

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Why It Matters: OpenAI’s demand for exclusivity is unusual, as venture capital firms typically diversify their investments across various companies in a sector.

Thrive, a venture capital firm founded by Joshua Kushner, led the funding round, committing $750 million from its own funds and approximately $550 million from its partners.

Other firms, including early OpenAI backer Khosla Ventures, Tiger Global, Altimeter Capital, and the California Public Employees’ Retirement System, have also invested in the company.

Notably, Cathie Wood's Ark Venture Fund and SoftBank Group Corporation have also invested in OpenAI’s latest funding round.

Other possible participants speculated to be involved include major tech firms like Microsoft Corporation, which has already poured around $13 billion into the AI company over the past five years, as well as Nvidia Corporation.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.