Elon Musk's xAI Raises $6B, Now Valued at $24B

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Facts

• In an announcement on its website on Sunday, Elon Musk's artificial intelligence (AI) company xAI said it raised another $6B in 'Series B funding.' The latest investors include Valor Equity Partners, Vy Capital, and Saudi Prince Alwaleed Bin Talal.¹
• The investors are among those invested in Musk's other companies like Tesla and X, formerly Twitter. Musk posted on X Monday that the goal of xAI is 'understanding the universe' and the 'rigorous pursuit of truth' without care for 'popularity or political correctness.'²
• Musk has also invested $750M of his own wealth into the company, with X putting up another $250M. Musk has stated that outside investors would own 25% of the company.³
• Now valued at an estimated $24B, xAI is the second-largest AI startup, behind OpenAI, which received $10B from Microsoft last year and is now valued at $86B. In third place is Anthropic, which is valued at $18B.⁴
• xAI, with its chatbot Grok, is in the race to develop artificial generalized intelligence (AGI). While Grok-1 reportedly outperformed Meta's Llama-2-70B and OpenAI's GPT-3.5, it didn't outcompete GPT-4, Google's Gemini, Llama 3, or Anthropic's Claude3.⁵
• Grok is trained with computer chips owned by cloud company Oracle, founded by Larry Ellison. Musk last month also stated, 'The two sources of unlimited data are synthetic data and real world video.'⁴

Sources: ¹thehill.com, ²Guardian, ³Daily Wire, ⁴wsj.com and ⁵VentureBeat.

Narratives

• Narrative A, as provided by Business Insider. While Musk is an expert at building rockets and good at promoting free speech, the AI industry is not his forte. To succeed in the AI race, you must first understand the potential of the technology, which Musk clearly doesn't given he thinks AGI will be created by next year. The billionaire will also overwork his employees to achieve these unrealistic goals, which is why his hiring offers will likely fall on deaf ears.
• Narrative B, as provided by wsj.com. Critics of Musk's AI endeavors clearly haven't seen his diverse record of success in the technology sector. In a unique fashion, Musk uses his several companies to complement each other, as shown by his SpaceX employees working with the Boring Company to build tunnels. Now, he's tapping into the rich information source of his social media company X to build AI that tries to understand and help humanity rather than control it.
• Cynical narrative, as provided by Truth Dig. The primary question here shouldn't be who raises the most money or who's more technologically savvy. It should be why are we allowing these companies — from OpenAI and Google to Anthropic and xAI — to continue their projects when their executives have all warned that AGI might destroy the world? This is an arena that needs extensive regulation and thought.

Predictions