OpenAI began decade ago as nonprofit lab. Musk and Altman now rivals

On Dec. 11, 2015, OpenAI launched as a nonprofit research lab after Elon Musk and a group of prominent techies, including Peter Thiel and Reid Hoffman, pledged $1 billion to develop artificial intelligence for the benefit of humanity. The idea was for the project to be be free of commercial pressures and the pursuit of money.

A decade later, that founding mission is all but forgotten.

Musk, now the world’s richest person, is long gone, having created rival startup xAI. And he’s been engaged in a heated legal and public relations fight with OpenAI CEO and co-founder Sam Altman.

Far from the nonprofit realm, OpenAI has emerged as one of the fastest-growing commercial entities on the planet, zooming to a $500 billion private market valuation, with almost all of that value accruing since the company’s launch of ChatGPT three years ago. More than 800 million people now use the chatbot every week.

Musk’s xAI, meanwhile, is expected to close a $15 billion round at a $230 billion pre-money valuation this month, sources familiar with the matter told CNBC’s David Faber in late November.

OpenAI and xAI are two of the main companies, along with Google, Anthropic and Meta, pouring money into AI models, as the market rapidly evolves from text-based chatbots to AI-generated videos and more advanced compute-intensive forms of content, as well as into agentic AI, with large enterprises customizing tools to enhance productivity.

For OpenAI, the price tag is almost incomprehensible: $1.4 trillion and growing. That’s primarily for the mammoth data centers and high-powered chips required to meet what the company sees as insatiable demand for its technology. For now, OpenAI is a cash-burning machine going up against tech’s megacaps and their chip suppliers, drawing comparisons to earlier waves of high-growth tech firms that spent heavily for years to challenge behemoth incumbents, but to mixed results.

“OpenAI has a very big role in the in the history of the development of artificial intelligence, and will forever have that role,” said Gil Luria, an equity analyst at D.A. Davidson, in an interview. “Now, will that role be Netscape, or will it be Google? We’ve yet to find out.”

It’s a position that would’ve been hard to imagine in 2016, when Nvidia CEO Jensen Huang hauled a black DGX-1 supercomputer up to OpenAI’s offices in San Francisco’s Mission District. The $300,000 machine had cost Nvidia “a few billion dollars” to develop, and there were no other buyers, Huang recalled recently on Joe Rogan’s podcast.

Musk, at OpenAI, was the only one who wanted it.

When Musk told him it was for “a nonprofit company,” Huang said all the blood…