OpenAI CFO Calls Musk Legal Challenge Competitive ‘Lawfare’

(Bloomberg) — OpenAI Inc. Chief Financial Officer Sarah Friar characterized Elon Musk’s legal challenge to stop the ChatGPT maker from becoming a for-profit company as competitive maneuvering.

“We hope that he won’t keep resorting to using law and lawfare to compete,” Friar said in an interview at Bloomberg House during the World Economic Forum in Davos on Tuesday. Musk, who owns rival xAI and was previously part of the team that launched OpenAI as a nonprofit, has claimed the company is breaching its founding mission. 

“Building AI is a very capital-intensive business, and I think even he recognized very early on that it would require us to be much more than a nonprofit,” she said. 

Friar is helping the artificial intelligence company line up funding and create new revenue streams. She said the company would likely have to continue to fundraise, but weighed the pros and cons of a public listing. An initial public offering could give OpenAI access to new kinds of financing, such as structured debt, that could bring down costs of raising capital, she said in the interview. The next cutting-edge GPT model will likely cost billions of dollars to develop, Friar has said.

Still, going public could force the company to focus on pleasing investors at a time when AI requires massive funding to develop frontier models. Friar said it would have to “bring along the right kind of investor” who understands the technology’s development process. 

“It’s always a potential station on the journey that we’re on, but I don’t want to make it the destination,” she said.

In October, OpenAI raised $6.6 billion in a funding round that gave the company a $157 billion valuation in one of the largest-ever private investments to fund innovation on its AI. 

OpenAI is moving into the “world of agents,” so-called reasoning models that can do the work of human employees, she said. The early use cases are to “solve day to day problems” like planning dinner for consumers or software development or research assistants for companies.

Friar said many enterprise clients, an important growth area for OpenAI, first came across the company’s products in their personal lives. The enterprise model is “really building across every sector of the economy,” Friar said. For example, Morgan Stanley uses OpenAI’s technology in parts of the bank’s wealth management and investment banking businesses, she said. 

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