Elon Musk’s xAI Successfully Raises $6B to Compete with OpenAI in the AI Field
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Elon Musk founded xAI last summer, and The Verge just reported that it’s already making waves by announcing a massive $6 billion funding round. According to the company, this money will help bring xAI’s first products to market, build advanced infrastructure, and accelerate research and development efforts into future technologies.
Musk has some history in the AI space. He co-founded OpenAI in 2015 alongside the current CEO, Sam Altman, and others. However, he parted ways with the company in 2018 due to disagreements over its priorities and direction, specifically OpenAI’s move away from open-source AI models and towards proprietary, closed models that they sell access to. Musk became one of OpenAI’s most vocal critics after that.
Fast-forward to July of last year, and Musk formally re-entered the generative AI arena with the announcement of xAI. Since then, the company has been aggressively working on building advanced AI systems that it claims will be “truthful, competent, and maximally beneficial for all of humanity.”
One of xAI’s initial offerings is a product known as Grok, which is similar to, but edgier than, OpenAI’s ChatGPT. Presently, Grok can only be accessed by X Premium subscribers. Benchmarks showcased by xAI indicated that Grok-1 outperformed competitors such as Llama-2-70B and GPT-3.5 but fell short when compared to Claude3 by Anthropic, Google’s Gemini, and the open-source Llama 3 by Meta.
This recent bout of funding attracted significant investors, including Andreessen Horowitz, Sequoia Capital, and even Prince Al Waleed bin Talal of Saudi Arabia. Filings from last year revealed xAI’s intentions to raise up to $1 billion in equity investments. More recently, there have been reports of a target increase to a staggering $6 billion, which was initially denied by Musk.
The creation of hardware with the capability to drive AI at this advanced level is both a significant challenge and costly. A recent report indicated that xAI would need a staggering 100,000 of Nvidia’s current H100 chips to power an upgraded version of Grok, with each chip costing between $30,000 and $40,000.
Musk’s ambitious plans include the launch of a new data centre by the fall of 2025. This represents a significant step forward in xAI’s technological capabilities.
Continuing the competition on AI for chips, expertise, and advancement comes at a high price. Major technology companies have already put billions of dollars into AI start-ups like Anthropic, in addition to the expenditures that Google, Apple, Amazon, Microsoft, and Meta are putting into their own AI initiatives.
Specifically, Microsoft has established a multi-billion-dollar collaboration with OpenAI, whose CEO, Sam Altman, is purportedly seeking trillions more to modernize the global chip market.
Even though Elon Musk has previously stated a desire to not internalize most AI and robotics capabilities, permitting more attention on outside projects, Tesla will keep employing AI engineers for autonomous vehicles. He expresses the intent to break from the traditional boundaries of car manufacturing as part of a wider plan.
Simultaneously, Tesla is preparing for its yearly meeting on June 13, where shareholders will begin voting on whether to restore Musk’s record-breaking $56 billion pay package, a key development considering Musk’s considerable sway across various technological sectors.
Over the years, Musk has made substantial contributions to AI research, and now his venture, xAI, is at the forefront of AI developments. It will be fascinating to watch how these efforts unfold and see which of xAI’s contributions will secure a place in the annals of AI history during this rapid evolution.
See also: Elon Musk’s xAI open-sources Grok
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Tags: ai, artificial intelligence, chatgpt, elon musk, openai, Tesla
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