‘Chasing vibes’ — OpenAI M&A strategy gets more confusing with TBPN

OpenAI announced another surprising deal on Thursday, 10 months after shelling out an eye-popping $6.4 billion for Jony Ive’s fledgling device startup, snapping up a media business that airs a three-hour daily tech talk show.

For a company that has incurred billions of dollars in losses due to infrastructure construction, OpenAI’s merger and acquisition strategy is difficult to determine. After the initiative with a value of over 850 billion dollars, announced “TBPN is my favorite technology program,” OpenAI CEO Sam Altman said in a Thursday post on X on its acquisition of Technology Business Programming Network.

“I don’t expect them to be any easier on us, I’m sure I’ll do my part to make that possible with the occasional stupid decision,” Altman said. wrote.

This is a pivotal moment for OpenAI as it prepares to go public this year. The company’s core products—popular AI models and the ChatGPT chatbot—face increasing competition. GoogleAnthropic and Elon Musk’s xAI will likely enter the public market first, with an anticipated offering from SpaceX.

OpenAI has been reeling from spending expectations and last month shut down its Sora video app, which quickly went viral after its launch six months ago. It’s not entirely clear how TBPN will fit into OpenAI’s strategy, but the AI ​​market moves so quickly that the moves that make the most sense today may not make as much sense tomorrow.

“As you have more and more disruptive competitors emerging, they need to build things that give people a unique reason to choose ChatGPT over other AI platforms,” Futurum Group CEO Daniel Newman said in an interview. “They’re after some excitement.”

Newman said that while OpenAI won’t be able to pay off all of its acquisitions, the company can afford to experiment, having just closed a $122 billion round of financing. He called TBPN “a pretty small bet for a lot of interest.”

OpenAI did not disclose terms of the agreement. The company did not respond to a request for comment.

OpenAI’s biggest deal to date was the acquisition of Ive’s io, which thrust the company into the world of complex hardware development for the first time. Ive is a legend in the field for designing the iPod, iPhone, iPad, and many other devices throughout his career. Appleand OpenAI is preparing to release its first devices as soon as next year.

In December, OpenAI hired Google’s Albert Lee to lead corporate development; This was a sign that the company was looking for more targets. Since then, several startups have been acquired across a variety of industries, including software startup Astral, cybersecurity startup Promptfoo, and healthtech startup. Torch.

OpenAI’s last major acquisition was by a developer rather than a company. In February, the company hired Peter Steinberger, the Austrian software developer behind the viral AI assistant OpenClaw. Like the surprise TBPN announcement, news of Steinberger’s hiring set social media alight.

Newman said Altman is likely trying to figure out the company’s next area of ​​focus and whether there’s “an interesting M&A path.”

“He hasn’t yet succeeded in many big, ambitious ideas,” Newman said.

Founded in 2024 by hosts John Coogan and Jordi Hays, TBPN quickly rose to prominence in Silicon Valley, building a loyal base of investors, founders, and tech insiders. The company has fewer than 60,000 subscribers on YouTube, but high-profile guests like Altman Microsoft CEO Satya Nadella and Meta CEO Mark Zuckerberg appears on the show regularly.

One note to employees On Thursday, OpenAI’s CEO of Applications, Fidji Simo, said the company believes it has “a responsibility to help create space for a real, constructive conversation about the changes that AI is creating.” Simo said OpenAI will benefit from TBPN’s “amazing communications and marketing instincts” but added that TBPN will make its “own editorial decisions.”

Gartner analyst Andrew Frank said TBPN was “not on the bingo card” as an acquisition candidate. But he said it might make sense if OpenAI is seen as a way to counter the narrative that artificial intelligence is a danger.

“If you’re a company like OpenAI that everyone is dying to hear about, I think you need an established channel to communicate with the broader world,” Frank said in an interview.

Paul Nary, a professor of mergers and acquisitions at the University of Pennsylvania’s Wharton School, doesn’t quite understand this.

“OpenAI buying @tbpn makes no sense to me,” he said wrote In X.

Nary elaborated on his thinking in an interview with CNBC and said that OpenAI’s statement was not very helpful.

“We’ll give you editorial control, but you’ll still be in our company,” Nary said. “So is there a conflict of interest there and what does that mean for the business moving forward?”

Nary said media and entertainment transactions were among the transactions most likely to fail, but argued that TBPN’s size did not impose too much financial liability for OpenAI. He expects the show to change a lot over time.

“What does this look like a year from now in terms of the show or what the founders are doing, I think it will be something different than it is today,” Nary said.

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