Elon Musk’s OpenAI Bid: A Costly Distraction from Tesla?

Elon Musk’s $97.4 billion bid to acquire OpenAI was swiftly rejected by CEO Sam Altman, who mocked the offer on X (formerly Twitter). Musk fired back, calling Altman a "swindler."

While Musk’s AI interests are well known, analysts see this as a distraction from Tesla’s struggles. Oppenheimer analyst Colin Rusch noted, “Tesla is repositioning as a Physical AI company, but this bid feels like a sideshow.” Tesla shares fell 7% on Tuesday, with investors worried about Musk’s shifting priorities. Meanwhile, SoftBank is reportedly investing $40 billion in OpenAI at a $260 billion valuation, making Musk’s bid seem far off the mark.

Tesla’s Challenges: Competition & Distraction

Tesla faces mounting competition. Google's Waymo is advancing self-driving tech, while Chinese automaker BYD slashed prices to below $10,000 and XPeng is offering 0% financing and free charging. These moves put Tesla at a disadvantage in a key market.

Musk’s Political Moves & Tesla’s Future

Musk’s growing involvement with the Trump administration, now leading the Department of Government Efficiency (DOGE), raises concerns. Rusch warned, “Musk’s political activity risks alienating key markets like California and the EU, where Tesla sales have already been declining.”

With Tesla’s global sales softening and Musk’s focus split, investors worry: Is Tesla’s future at risk?

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