WSJ What’s News - Altman Pushes Back on Musk’s OpenAI Bid

Episode Date: February 11, 2025

A.M. Edition for Feb. 11. The EU pledges $200 billion in AI spending to try and catch up with the U.S. and China in the race to develop the most complex AI models. WSJ tech reporter Sam Schechner, attending an AI summit in Paris, says world leaders are vying for a piece of the AI boom to boost their economies. Plus, OpenAI CEO Sam Altman rejects advances from a group of investors led by Elon Musk. And New York City Mayor Eric Adams scores a legal reprieve as the Justice Department orders an end to his bribery case. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

TD Direct Investing offers live support. So whether you're a newbie or a seasoned pro, you can make your investing steps count. And if you're like me and think a TFSA stands for total fund savings adventure, maybe reach out to TD Direct Investing. A legal reprieve for New York City Mayor Eric Adams as the DOJ orders an end to his bribery

case. Plus, OpenAI's Sam Altman rejects the advances of a group led by Elon Musk, and world leaders converge on Paris for an AI summit as they try to put the tech to work in boosting their economies. We've gone from trying to avert catastrophe to trying to make sure that Europe, and frankly other parts of the world as well, can participate in and catch up in this AI race. It's Tuesday, February 11th.

I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. The Justice Department is ordering federal prosecutors in Manhattan to drop their bribery case against New York City Mayor Eric Adams, claiming the indictment against him interfered with his ability to participate in President Trump's immigration enforcement. Adams was charged in September with taking illegal campaign contributions from Turkey

and accepting $100,000 in travel and hotel perks in exchange for official acts, making him the first sitting New York City mayor to be indicted. Adams had denied any wrongdoing and called the indictment politically motivated, accusing former Justice Department officials of targeting him because of his criticisms of then-President Biden's handling of the migrant crisis. Those accusations won the Democrat an ally in Trump who had floated the idea of a pardon. A spokesman for the U.S. Attorney's Office in Manhattan declined to comment. Rounding up a few other developments out of Washington, President Trump has pardoned former Illinois Governor Rod Blagojevich, who was convicted nearly a decade and a half ago on

corruption charges. Trump already commuted Blagojevich's 14-year sentence in 2020 and repeated claims yesterday that the Republican was treated unfairly by prosecutors. It's my honor to do it. I've watched him. He was set up by a lot of bad people, some of the same people that I had to deal with. In another executive order, Trump is stopping enforcement of the Foreign Corrupt Practices Act, which forbids U.S. companies from bribing foreign officials. The statute has been used to punish overseas misconduct at banks such as Goldman Sachs

and mining giants like Glencore. In its place, the White House is asking for new guidelines to be drafted to remove obstacles to American firms competing abroad. And the President signed an order yesterday backing the use of plastic straws and directing the federal government to stop buying paper straws, which the White House described as being non-functional and pushed by quote, woke activists who prioritize symbolism over science. Open AI CEO Sam Altman has rejected a bid from a group of investors led by Elon Musk

to gain control of the company. As we reported on our PM show yesterday, Musk's lawyer says he's submitted an unsolicited offer of $97.4 billion to buy the non-profit that controls OpenAI. In a post on X, Altman wrote, quote, no thank you, but we will buy Twitter for $9.74 billion if you want, end quote, using the old name for Musk's social media platform and moving the decimal point from the bid for OpenAI one space to the left. In a Slack message to employees, Altman wrote, "...our structure ensures that no individual

can take control of OpenAI," and described the bid as, quote, tactics to try and weaken us. We are exclusively reporting that activist Elliott Investment Management has built a more than $2.5 billion stake in Phillips 66 and plans to push for operational changes at the Houston-based oil refiner to boost its stock. According to people familiar with the matter, those changes could include selling or spinning off its midstream business. Jenny Strasburg covers energy for the journal. Phillips 66, which is a big refiner in the U.S., has about a $50 billion market cap. And it also has a very valuable business called Midstream. And that's a collection of pipelines and terminals that transport oil and gas. And during the US shale boom, that became ever more valuable.

So what Elliot is looking at is could that Midstream business be worth more outside of Phillips 66 than it is inside Phillips 66? Just two days ago, Jenny reported that Elliott has also taken a stake in BP. The British oil major today posted lower than expected earnings and announced a strategy reset to focus on growing its cash flow and shareholder returns. Shares in Phillips 66 are up in off-hours trading, while BPs are little changed in London. In other business and markets news, a record 126 million people watched the Philadelphia Eagles defeat the Kansas City Chiefs in Sunday's Super Bowl on Fox and various streaming platforms. That's according to preliminary numbers from Nielsen and the network, making it the

third Super Bowl in a row to set a new viewership record. South Korea's state-run think tank has cut its growth forecast for the country this year, citing President Trump's trade policy as a downside risk to exports. The Korea Development Institute now sees GDP growing at 1.6 percent in 2025, compared with a 2 percent forecast made in November. On deck, Federal Reserve Chair Jerome Powell will begin two days of testimony on Capitol Hill this morning in his first congressional appearance since President Trump's inauguration. He is likely to face questions on interest rates and inflation, as well as how Trump's policy changes could affect the Fed's outlook.

And earnings season continues, with Coca-Cola, Marriott, Lyft, and Shopify all set to report results. Coming up, Paris is the center of the AI world today, with industry and world leaders gathered in the city for a major summit. We'll check in with tech reporter Sam Schechner in the French capital after the break. World leaders and the heads of top tech companies are gathering today in Paris for the final day of a major international AI summit. French President Emmanuel Macron used the event yesterday to announce a new nuclear-powered

AI computing project. The EU this morning pledged $200 billion in AI investments, and US Vice President JD Vance just took the stage. Journal tech reporter Sam Schechner is also there. And he joins me now from the bustling Grand Palais in the French capital. First off, Sam, these AI summits, gotta say in a pretty impressive list of attendees this year,

India's prime minister, the UN secretary general, the head of Google, we've seemingly got ourselves a new must attend global gathering. And yet what is the point of this? Is it to set policy, to make deals, something else? That's a very good question. What is the point, right?

When the first one of these was convened by the UK in Bletchley Park, they were thinking very specifically about AI safety and really the potential for catastrophe from AI models in the future. And the French very consciously broadened the mandate for this summit. And this is much more about how to reap the benefits from AI. In addition to talking about governance, talking about some safety issues, talking about ethical issues, Macron gave the accent last night in his speech on $109 billion of investments in coming years for France alone and a kind of regulatory loosening that he promised to encourage more AI in Europe.

So we've gone from trying to avert catastrophe to trying, I guess, to make sure that Europe and frankly other parts of the world as well can participate in and catch up in this AI race. That's a pretty big question for the EU in particular, is it not, amid some concerns that the continent was maybe falling behind relative to the US and China in kind of seizing AI's economic benefits? Well, I mean, people in Europe have been pretty bruised over the last few technological revolutions. There are some AI companies, France has Mistral AI, which is one of the prominent makers of what's

called foundation models, these generative AI models, but they're smaller and less capitalized than something like OpenAI by an order of magnitude. So it's definitely an issue. But interestingly, France made a real push for the summit to push beyond just the EU. They're co-presiding the summit with India and there's this push from France to make sure that the conversation about getting the benefit from AI is not just something for a handful of countries or that we're not talking about a bipolar US China race, but that we're really talking about something that benefits everybody. I was going to say, what does that look like?

Is that like, you know, we think about the UN climate talks where the goal is always try to get some agreements on paper, are new rules of the road being talked about or we just mean spreading the benefits? Is that just more sovereign AI deals between tech companies and individual countries to, I don't know, build out within their own borders or something like that? It's a little bit of both. Everybody wants to have more sovereign AI. But there's also talk about how do you make for governance that is more broad-based, that it's not just a handful of players making those decisions. Is that going to be the priority that's articulated by the Trump administration or by the Chinese?

That's perhaps less clear. Right. And speaking of that, Sam, we just heard from Vice President J.D. Vance at the summit. Let's take a quick listen. Now, our administration, the Trump administration believes that AI will have countless revolutionary applications in economic innovation, job creation, national security, health care, free expression and beyond. And to restrict its development now will not only unfairly benefit incumbents in the space, it would mean paralyzing one of the most promising

technologies we have seen in generations. Because finally, Sam, beyond a new administration in Washington, the other big 2025 development has been DeepSeek, of course, the Chinese AI company that showcased its generative AI model last month that was built at a fraction of the cost of what some of the leading AI companies have spent to develop theirs. Has DeepSeek's impact been felt there? I mean, it's been a topic of almost every conversation here. What does it mean? And you hear different things. The people who make the chips that perhaps DeepSeek needed fewer of say, well, hold on a second, if anything, more efficiency is going to mean more demand.

So we're going to sell more chips. You talk to people who are backers of Mistral, which put the accent on efficiency, and they say that DeepSeek is sort of in line with what they're doing and is actually a great advertisement for what they do and perhaps people who want a more efficient model but might not want a Chinese model will turn to a European one. I've been speaking to Wall Street Journal tech reporter Sam Schechner, who is surrounded by very large boom mics and cameras there at the Grand Palais in Paris. Sam, thanks for making the time. Always a pleasure to speak, Luke.

And that's it for What's News for this Tuesday morning. Today's show was produced by Daniel Bach and Kate Bullivant with supervising producer Christina Rocca, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.