Cage match on hold: For once, Musk and Zuckerberg are on the same side of a fight

Thanks to AI, Zuck and Musk are unlikely allies

12/16/24 11:13AM

In June 2023, Elon Musk tweeted that he was “up for a cage match” with Mark Zuckerberg, and Zuck accepted the challenge, posting “send me location” in an Instagram story.

I’m up for a cage match if he is lol
— Elon Musk (@elonmusk) June 21, 2023

A year and a half later, while the two billionaires still haven’t fought in the octagon, they have formed an unlikely alliance against a common competitor: OpenAI. Over the weekend, The Wall Street Journal reported that Meta is urging California’s attorney general to block OpenAI’s conversion to a for-profit entity, following in Tesla CEO Musk’s footsteps. Musk, an OpenAI founder, previously sued OpenAI for bailing on its nonprofit mission, though OpenAI posted a lengthy statement last week saying Musk wanted OpenAI to be for-profit from the start.

The Journal reported that Meta said in a letter to AG Rob Bonta that allowing OpenAI to become a for-profit company would set a dangerous precedent by letting the “non-profit” investors benefit from tax write-offs until the company was ready to go public:

“If OpenAI’s new business model is valid, non-profit investors would get the same for-profit upside as those who invest the conventional way in for-profit companies while also benefiting from tax write-offs bestowed by the government.”

Of course beyond the skewed incentive structure that might be encouraged by allowing a nonprofit to convert to a for-profit, Meta has another reason for wanting this deal blocked: OpenAI is one of its biggest AI competitors. Meta has led the charge with open-sourcing AI through its Llama models. Meanwhile, Musk’s xAI has raised $12 billion to buy GPUs and compete with OpenAI as well.

OpenAI raised $6.6 billion in October, valuing the company at $157 billion, but this fundraise was contingent on the company converting to a for-profit entity. California blocking this move would be a huge blow to the ChatGPT creator and benefit Zuckerberg and Musk’s AI ambitions.

David Crowther, Claire Yubin Oh

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Shares of eBay fell as much as 10.5% in premarket trading on Thursday morning after the company gave a lower-than-expected profit forecast for the important holiday shopping season.

The e-commerce giant reported solid numbers for the third quarter on Wednesday, with revenue up 9% as reported to $2.8 billion and gross merchandise volume rising 10% to $20.1 billion, topping the average analyst forecast of $19.4 billion, per Bloomberg.

However, concerns about the future somewhat overshadowed these results.

eBay outlined its profit outlook for the period ending in December to $1.31 to $1.36 a share, with revenue at $2.83 billion to $2.89 billion. According to Bloomberg-compiled data, this broadly matches Wall Street’s estimates for the top line, but misses on the bottom line, with analysts forecasting EPS to come in at $1.39 — suggesting the company expects some further margin pressure.

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