Tesla can’t afford another Twitter-size distraction
Subscribe to enjoy similar stories. In the eyes of Tesla shareholders, Elon Musk hardly needed another distraction. OpenAI could turn out to be a costly one.
The EV maker’s multitasking chief executive is leading a consortium bidding $97.4 billion for the nonprofit entity that controls the OpenAI business. The bid is being backed by Musk’s own artificial-intelligence company called xAI and includes backers from around the venture-capital world, The Wall Street Journal reported late Monday. The price for OpenAI is more than double what Musk paid for Twitter in 2022.
And it is a long shot at best, especially given the personal friction between Musk and OpenAI Chief Executive Sam Altman. Altman responded to Musk’s offer on Monday by offering to buy Twitter for $9.7 billion—an allusion to the scorching decline in market value that the social-media platform now called X has experienced under Musk’s ownership. Tesla’s share price fell 6.3% on Tuesday.
The EV maker just closed out a tough year, when total automotive revenue fell for the first time ever on an annual basis, according to data from FactSet. And that is notably different from 2022, when the company’s sales were still growing at high double-digit rates. In a report Tuesday, Colin Rusch of Oppenheimer called the OpenAI move “a distraction from Tesla’s challenges." Distractions have proven costly to Tesla’s shareholders before.
The company’s market cap plunged by more than two-thirds in 2022 after Musk first revealed an ownership stake in Twitter in early April. Investors worried about Musk’s focus on the platform and his divisive presence on it. Tesla’s stock didn’t even fully recover those losses until after the U.S.
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