OpenAI CEO Sam Altman’s terse “no” at a Paris conference seemed to shut the door on Elon Musk’s surprise $97.4 billion bid.

But experts say the reality is far more complex.

Musk’s play, technically aimed at OpenAI’s nonprofit assets, could be less about acquiring control and more about strategically disrupting Altman’s efforts to reshape OpenAI’s structure.

The Altman plan: from non-profit ideals to for-profit reality

Altman is pushing to transform OpenAI into a fully for-profit entity, a move seen as essential for securing the capital needed to fuel its ambitious AI development.

However, Musk’s unexpected offer throws a wrench into these plans, creating legal and financial uncertainties.

According to Marc Toberoff, the attorney representing Musk and his investors, the core principle is ensuring the non-profit receives adequate compensation.

“If Sam Altman and the present OpenAI, Inc. Board of Directors are intent on becoming a fully for-profit corporation, it is vital that the charity be fairly compensated for what its leadership is taking away from it: control over the most transformative technology of our time,” Toberoff stated in a letter of intent.

The impossibility of a straight sale: decoding OpenAI’s structure

However, experts emphasize that a direct sale of OpenAI’s nonprofit arm is impossible.

OpenAI Inc., which oversees the for-profit business OpenAI LP, can only be owned by another non-profit, as explained by Jill Horwitz, a professor at the UCLA School of Law.

Horwitz clarified that while a sale of the entire entity isn’t feasible, a non-profit’s assets are, in fact, sellable; however, Altman cannot decide whether the organization should be sold, that decision resides in the board of the non-profit.

She also stated that this kind of transaction is “up to the board of the nonprofit and, if the transaction is substantial like this one, with the involvement of the relevant state attorney generals and courts.”

Limited control: even with an acquisition, Musk wouldn’t be king

Even if Musk managed to acquire OpenAI’s nonprofit assets, he wouldn’t gain absolute control.

Michael Wyland, a non-profit governance expert, pointed out that funds from any sale would be earmarked for the nonprofit’s mission.

Crucially, Musk wouldn’t automatically control OpenAI’s nonprofit board, unless the sales agreement specifically granted him that power.

Musk’s motivations go beyond mere acquisition.

His long-standing feud with Altman, stemming from his departure from OpenAI after failing to gain control, and a subsequent lawsuit alleging a deviation from its original mission, suggest a more complex strategy.

Rose Chan Loui, founding executive director of the Lowell Milken Center for Philanthropy & Nonprofits at UCLA Law, believes that simply making the bid “sets a floor”.

And forces OpenAI to respond to the bid, complicating Altman’s plans to turn OpenAI from a for-profit entity controlled by a nonprofit into an entirely for-profit company.

Loui also stated that, according to Delaware law, the state where OpenAI’s nonprofit was founded, and the fact that OpenAI is attempting to buy the nonprofit’s assets itself, once a company has said it’s considering a sale, it must at least consider unsolicited bids by outsiders.

A disruptive gambit: complicating funding and increasing scrutiny

From a funding perspective, Tunguz, the General Partner at Theory Ventures, believes that Musk’s actions “complicate everything,”

He also compared it to game theory, saying that the management team for OpenAI must figure out how to deal with Musk’s bid.

That also mean that they have to figure out how to negotiate in a way that keeps prospective investors happy, so the plan to turn the company into a for-profit “can continue in a way that the Attorneys General in California and Delaware can understand and publicly support?”

OpenAI is reportedly in the final stages of securing a $40 billion investment from Japan’s Softbank, which would value the company around $300 billion.

Musk’s move introduces added uncertainty to OpenAI’s crucial relationship with its primary financial backer, Microsoft.

Tunguz also mentioned that whether the bid fails or not, now all of a sudden OpenAI has to spend a lot more time on understanding all these legal questions, working with the Attorney Generals of these states, and it’s just friction.

Playing the long game: more than just a takeover attempt

Steve Jang, founder and managing partner at Kindred Ventures, sees the situation as a “long chess game” given Musk’s standing not only as an OpenAI ex co-founder with a grudge, but as the owner of OpenAI competitor, X.ai.

Jang explained that “It says to shareholders of OpenAI, if you are ever willing to sell, I’m a buyer.”

Jang also stated that, in general, Musk likely had no expectation that the board would approve the bid, “But it does create a necessary review and vote,” he told Fortune.

“And it says to the market, this is what we imply the value of OpenAI to be.”

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Following Meta CEO Mark Zuckerberg’s mid-January warning to employees about raising performance standards and cutting 5% of the workforce, recent layoffs impacting approximately 3,600 workers have generated controversy.

Some affected employees are challenging the company’s assertion that the cuts solely targeted low performers, claiming they received favorable performance reviews.

Zuckerberg’s warning: raising the bar on performance

In an internal memo obtained by Bloomberg, Zuckerberg stated the plan to “manage out people who aren’t meeting expectations over the course of a year,” and “do more extensive performance-based cuts during this cycle.”

At the time, Zuckerberg made it sound as if it would just be low performers who would be affected by the layoffs.

However, some workers who claim they received favorable performance reviews and were otherwise not the lowest performers have gotten caught up in the cuts, which began Monday and impacted about 3,600 workers.

One former Meta employee, Kaila Curry, posted on LinkedIn that she was laid off despite receiving an “exceeds expectations” rating on her midyear review.

“I frequently asked for feedback and was always told I was doing a good job,” Curry wrote.

I was never placed on a PIP [performance improvement plan], never given corrective feedback, and never properly mentored or provided clear expectations. I simply put in the work… I am not a low performer.

Another laid-off ex-Meta employee, LinkedIn user Steven S., a former product designer for Instagram, claimed the company’s assertion it’s cutting the dead wood is “flat-out wrong,” noting that the “label is misleading, and for many of us, it’s flat-out wrong.”

While this user didn’t mention or show what rating he received on the performance review.

Meta’s definition of “low performer”: unclear metrics

However, it’s unclear what Meta qualifies as a “low performer.”

The company didn’t immediately respond to Fortune’s request for comment.

Business Insider also spoke with several Meta employees who had been affected by the layoffs and spoke on the condition of anonymity.

They said they had received an “at or above expectations” rating on their 2024 assessments, which would rank them as mid-tier employees at Meta, not low performers.

“The hardest part is Meta publicly stating they’re cutting low performers, so it feels like we have the scarlet letter on our backs,” one employee told Business Insider.

People need to know we’re not underperformers.

Criticism of Meta’s messaging

Diane Brady, executive director of Fortune Live Media, criticized Zuckerberg’s labeling of Meta’s most recently laid-off employees as low-performing.

“There’s something to be said for letting people leave with their dignity intact rather than branding them as subpar performers,” Brady wrote in her CEO Daily newsletter on Tuesday.

“Companies that celebrate and support former employees tend to create more fans than foes.”

A ‘year of efficiency’

These layoffs follow Zuckerberg’s declared “year of efficiency” in 2023, which involved eliminating 10,000 jobs.

While Zuckerberg insisted the latest round of layoffs would exclusively impact the lowest-performing employees, the company has simultaneously expedited hiring for machine-learning engineers, as reported by Reuters, reflecting a strategic focus on AI development.

“From a hiring standpoint, our focus continues to be on adding technical talent to support our strategic priorities,” Susan Li, Meta’s chief financial officer, said during a January 29 call with investors.

For now, affected Meta employees will continue to question why they were let go.

“Maybe I ‘lacked masculine energy‘ (to quote Mark Zuckerberg himself),” Curry wrote. “Who knows?”

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Asian equity markets exhibited a mixed performance on Wednesday as investors continued to monitor President Donald Trump’s latest trade policies and assessed the implications of Federal Reserve Chair Jerome Powell’s recent remarks on interest rates.

The prospect of escalating trade tensions, particularly Trump’s announcement of 25% tariffs on imported steel and aluminum, has created uncertainty in the region.

While South Korea and Japan are significant exporters of steel to the US, the overall impact on their economies may be limited due to their diversified export portfolios.

Regional market performance: Nikkei gains, Hang Seng surges, Shanghai slips

Japan’s benchmark Nikkei 225 rose 0.2% in afternoon trading to 38,864.96.

Australia’s S&P/ASX 200 gained 0.4% to 8,519.40. South Korea’s Kospi edged up 0.3% to 2,546.41.

Hong Kong’s Hang Seng jumped 1.6% to 21,626.80, as excitement over DeepSeek continued, although market watchers are wondering when the rally might peak.

The Shanghai Composite slipped less than 0.1% to 3,317.83.

The moves on Wall Street were modest not only for US stocks but also in the bond market, where Treasury yields rose by only a bit.

The potential for a trade war remains a significant concern, with analysts acknowledging the potential for increased prices for US consumers and broad economic disruption.

A negotiating tactic? Trump’s past actions offer hope

However, trading activity has remained relatively calm, partly due to Trump’s history of quickly retracting tariff threats.

His earlier decision to suspend planned tariffs on imports from Canada and Mexico suggests that such measures may be primarily used as a negotiating tactic rather than a fixed long-term policy.

That in turn has much of Wall Street hoping the worst-case scenario may not happen.

“The metal tariffs may serve as negotiating leverage,” Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, told Yahoo Finance.

Powell’s cautious stance: no immediate rate cuts

Federal Reserve Chair Jerome Powell reiterated his stance on Capitol Hill Tuesday that the Fed is in no hurry to ease interest rates any further.

The Fed had cut its main interest rate sharply through the end of last year, hoping to give a boost to the economy.

But worries about inflation potentially staying stubbornly high have forced the Fed and traders alike to cut back expectations for cuts in 2025.

Some traders are even betting on the possibility of no rate cuts, in part because of worries about the effects of tariffs.

Powell said the economy and interest rates are in a “pretty good place” and acknowledged the risks of both moving too slowly (potentially damaging the economy) and moving too quickly (potentially fueling inflation).

Economic resilience and corporate profits: a balancing act

Higher rates tend to put downward pressure on prices for stocks and other investments, while pressuring the economy by making borrowing more expensive.

That could be risky for a US stock market that critics say already looks too expensive.

The S&P 500 is not far from its all-time high set late last month.

One way companies can offset such downward pressure on their stock prices is to deliver stronger profits.

And big US companies have been mostly doing just that recently, as they report how much profit they made during the last three months of 2024.

That, though, hasn’t always been enough.

Coca-Cola rallied 4.7% after reporting stronger profit and revenue than analysts expected.

Growth in China, Brazil and the United States helped lead the way.

DuPont climbed 6.8% after the chemical company likewise reported better profit than Wall Street expected.

US market performance on Tuesday

All told, the S&P 500 rose 2.06 points, or less than 0.1%, to 6,068.50.

The Dow Jones Industrial Average rose 123.24, or 0.3%, to 44,593.65, and the Nasdaq composite fell 70.41, or 0.4%, to 19,643.86.

Treasury yields and energy prices

In the bond market, the yield on the 10-year Treasury rose to 4.53% from 4.50% late Monday.

The two-year Treasury yield, which moves more closely with expectations for upcoming action by the Fed, held steady.

It remained at 4.28%, where it was late Monday.

In energy trading, benchmark US crude fell 29 cents to $73.03 a barrel.

Brent crude, the international standard, declined 27 cents to $76.73 a barrel.

In currency trading, the US dollar edged up to 153.64 Japanese yen from 152.43 yen.

The euro was unchanged at $1.0363.

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Contemporary Amperex Technology Co. Ltd. (CATL), the world’s largest electric vehicle battery manufacturer, has filed for a secondary listing in Hong Kong in what could be the city’s largest stock offering in years.

The move by the Shenzhen-listed battery giant, a key supplier to Tesla, Volkswagen, and other major automakers, underscores Hong Kong’s growing role as a capital-raising hub for Chinese firms.

The long-anticipated listing is part of a broader wave of Chinese companies seeking offshore funding, with analysts forecasting a $20 billion rebound in Hong Kong’s initial public offerings this year.

CATL has appointed JPMorgan, Bank of America, China’s CICC, and China Securities International as lead banks for the offering, with Goldman Sachs, Morgan Stanley, and UBS also involved in the deal.

The listing, however, comes at a delicate time for CATL.

The company was added to a US blacklist last month for alleged ties to China’s military, raising potential challenges for its overseas expansion.

In its prospectus, CATL dismissed the designation as a mistake and stated it was actively working to have it removed.

The restriction limits the company’s dealings with certain US government agencies but does not directly impact its global commercial operations.

CATL could raise up to $7 billion

While CATL has not disclosed the exact size or timeline of the offering, market sources suggest it could raise up to $7 billion, depending on market conditions.

Morgan Stanley had earlier estimated that the listing could bring in as much as $7.7 billion.

The company intends to use the funds to accelerate its global expansion, including a new production facility in Hungary and a joint venture with Stellantis in Spain.

CATL is also investing in battery projects in Indonesia as part of its broader strategy to solidify its position as the dominant player in the EV battery market.

Despite its market leadership, CATL has warned of a potential revenue decline of up to 11% in 2024 due to lower product prices.

The company, which has held the top spot in the global EV battery industry for eight consecutive years with a 38% market share in 2024, reported revenues exceeding $50 billion in 2023.

However, it expects net income growth of up to 20% for last year, its slowest pace since 2019.

Can CATL’s listing boost Hong Kong’s capital market

CATL’s listing is expected to be a crucial test for Hong Kong’s stock market, which has struggled with weak deal flows in recent years.

The city’s capital markets have seen a resurgence in early 2025, driven in part by renewed investor confidence in Chinese technology and electronics stocks.

The Hang Seng Index has climbed 13% over the past month, bolstered by optimism following breakthroughs in artificial intelligence and a more favorable economic outlook.

“It is too early to say Hong Kong is back,” Gary Ng, a senior economist at Natixis, told the FT.

The CATL listing “signals that Hong Kong still has advantages for Chinese firms seeking overseas funding”, Ng said, but added that “equity investors remain sceptical of valuations due to decelerating growth in China and geopolitics”. 

Hong Kong’s investment banks may also see limited gains from the renewed IPO activity.

The Financial Times recently reported that rising competition from Chinese banks has pressured fees for deals like CATL’s, making it harder for global banks to profit from the listing boom.

CATL’s heavily redacted filing also flagged currency risks, noting that fluctuations in the renminbi could impact its ability to pay dividends in Hong Kong dollars.

Such concerns reflect broader uncertainties surrounding Chinese firms seeking offshore listings amid volatile economic conditions.

As CATL moves forward with its Hong Kong debut, investors will be watching closely to see whether the offering can reinvigorate the city’s IPO market and whether geopolitical risks will pose any further hurdles to its global ambitions.

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Chinese technology stocks have entered a bull market, with the Hang Seng Tech index surging more than 25% from its January low.

The sharp rally follows a renewed wave of investor optimism, driven in part by DeepSeek’s artificial intelligence breakthrough, which has shifted global perceptions about China’s technological capabilities.

The gains come as foreign investors reassess China’s tech sector, with major companies such as Alibaba, Xiaomi, Baidu, and BYD leading the charge.

In contrast, US tech stocks have struggled, with the Nasdaq 100 rising just 4.4% over the same period, and the “Magnificent Seven” recording less than 0.5% gains on an equal-weighted basis.

“Only Chinese internet companies are globally competitive and comparable to the US Magnificent Seven,” said Bush Chu, investment manager for Chinese equities at Abrdn in a report by FT.

That improvement in sentiment has driven some flows back to China. We are starting to see some outperformance and a rally in China in recent weeks because of that.

Alibaba (HKG: 9988), Xiaomi (HKG: 1810), Baidu (HKG: 9888), and BYD lead the rally

Shares of Alibaba jumped more than 6% on Wednesday following reports that the e-commerce giant is working with Apple to introduce the iPhone maker’s AI features in China.

“While we’re almost all talking about DeepSeek and AI advancements coming out of China, other Chinese tech firms are coming out with some pretty amazing stuff,” Brian Tycangco, editor and analyst at Stansberry Research, said.

Other major winners in the AI-driven rally include Xiaomi, up 34%, Baidu, up 13%, and BYD, up 40% over the last month.

E-commerce platforms JD.com and Meituan have also benefited, rising 24% and 11%, respectively.

Their gains have been supported by strong consumption data from the Lunar New Year holiday and rising expectations of fiscal stimulus from Beijing later this year.

The broader Hang Seng index has climbed 15% over the past month, reflecting growing investor confidence in China’s economic outlook.

Mainland China’s CSI 300 index, however, has seen a more modest 4% gain, as concerns over tariffs, a struggling property market, and deflationary pressures continue to weigh on sentiment.

DeepSeek’s AI model reshapes investor sentiment

The market rally was sparked by DeepSeek, a Chinese AI developer that unveiled a large language model in late January, reportedly built with far less computing power than its US counterparts.

The news triggered a global debate over the necessity of large-scale AI investments and led to a sharp sell-off in US tech stocks, with Nvidia losing a record $589 billion in market value on January 27.

While the US market reacted negatively, Chinese tech stocks surged, particularly companies positioned to benefit from AI innovations.

Cloud computing firms, consumer electronics manufacturers, and search engine operators saw strong gains, reflecting investor optimism about AI-driven growth.

Stock Connect program data shows high interest among Chinese investors

Investor enthusiasm is reflected in the sharp increase in trading volumes through the Stock Connect program, which allows mainland Chinese investors to buy Hong Kong-listed stocks.

Data shows that average daily turnover in February was two-thirds higher than in January and three times higher than the same month last year.

Analysts said investors were boosted by the belief that Chinese development of LLMs was advancing and consumer-facing companies would rapidly adopt them.

Citi analysts wrote in a note on February 3 that AI investment in China remains underappreciated by global investors.

“The US is strong in terms of zero-to-one innovation, but China is stronger in terms of one-to-100 innovation, in terms of widening access and adoption of tech,” he said.

As China’s tech sector continues its rapid recovery, investors will be closely watching how AI adoption plays out and whether the momentum can be sustained in the face of geopolitical uncertainties.

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