Rocket Rivalry

OpenAI CEO Sam Altman explored investing in or partnering with a rocket company that would rival Elon Musk's SpaceX, per The Wall Street Journal.

Context

Altman and Musk co-founded OpenAI together in 2015, but their relationship soured when Musk left the board in 2018 due to differences over the company’s direction. Musk now runs his own AI company, xAI, which competes directly with OpenAI. Altman has also recently launched Merge Labs, a brain-computer interface startup that competes with Musk's Neuralink. Additionally, OpenAI is building a social network that could potentially compete with Musk's X.

SpaceX Rival

The WSJ reported on Wednesday that Altman had reached out to Stoke Space – a rocket company founded by former Blue Origin employees – over the summer, in an effort to rival Musk’s SpaceX. The discussions intensified in the fall but ultimately did not result in a deal.

One proposal involved OpenAI making a series of investments in Stoke that would eventually give the AI company a controlling stake, with total investments reaching billions of dollars over time.

Stoke Space’s Nova

Altman's goal was to use Stoke Space’s rockets to deploy AI data centers in space, where they could use solar energy to power operations and reduce environmental impact on the Earth.

Stoke Space is currently developing Nova, a fully reusable rocket similar to SpaceX’s Falcon 9 boosters, which re-land themselves autonomously. Stoke Space is one of a few companies looking to challenge SpaceX’s dominant position, with other notable companies including Rocket Lab and Jeff Bezos’ Blue Origin.

OpenAI Under Pressure

Altman also declared a “code red” on Monday to improve ChatGPT after the chatbot began losing market share to Google's Gemini. OpenAI postponed launching other products and asked staff to shift to teams working on the chatbot. 

Nvidia's chief financial officer said this week that the company's $100B deal with OpenAI hasn’t been finalized yet as OpenAI also faces growing competition from Anthropic, which is rapidly increasing sales among coders and enterprises.