Hey, everybody. Welcome back to the Elon Musk
Podcast. This is a show where we discuss
the critical crossroads that shape SpaceX, Tesla X, The
Boring Company and Neuralink. I'm your host, Will Walden.
Elon Musk's AI company XAI is set to raise $6 billion in his
latest funding round. Now, this financial boost is
aimed at advancing research and development amid strong
competition in the AI sector, particularly facing Open AI,
which Musk was a Co founder of but left years later.
Now, investors participating in the Series B funding round
include prominent venture capital firms such as Anderson
Horowitz, Sequoia Capital, Valor Equity Partners, VI Capital, and
Fidelity Management and Research.
Additionally, Saudi Prince Alba, Lead Bintalal and Kingdom
Holding are among the backers as announced on XA is website and
according to Elon, XA is valuation before this funding
round was $18 billion. This new infusion of 6 billion
will elevate the startups evaluation to $24 billion.
The funds are intended to help XAI bring its initial products
to market, construct advanced infrastructure, and speed up the
development of future technologies.
Now, this funding marks a significant step in the
escalating AI competition, where leading startups have been
raising substantial amounts to support the computational
demands required for training large language models.
Now, these models form the backbone of generative AI tech
such as Open AI. Is ChatGPT.
Now? Open AI, who's the creator of
ChatGPT, has secured $13 billion in funding for Microsoft.
Another competitor, Anthropic, has raised over $6 billion.
In this context, Musk's X AI is attempting to catch up, having
been publicly launched in July of the previous year.
But some investors have expressed skepticism about XAIS
ability to compete given its late start.
And despite these concerns, X AI launched his chatbot Grok in
November, making it accessible to subscriber on Musk's social
media platform X. The company introduced its
latest AI model, Grok 1.5 learned.
The company introduced its latest AI model, Grok 1.5,
earlier this year, and Musk originally Co founded Open AI as
a nonprofit research lab in 2015 with Sam Altman, who currently
serves as Open AICEO. However, Musk left the company
following a dispute over control.
Recently, tensions resurfaced when Musk and Open AI and Altman
accusing them of deviating from Open AI's initial mission for
profit motives. Since its inception, XA has been
closely integrated with X. The AI startup benefits from
exclusive access to X's vast repository of post for training
its models, and additionally, X AI employees have occasionally
operated from Twitter's long standing headquarters in
downtown San Francisco. Now, Elon Musk hinted at more
announcements in the coming weeks on X following the
fundraising revelation. And this development positions
X. AI as a significant player in
need to compete with established AI firms like Open AI and others
in the AI landscape. Now, the new funds are entirely
fresh capital as confirmed by Musk to Axios.
There's no indication that these are shares from Musk's
acquisition of Twitter. Despite the overlap of
investors, it remains unclear if the original backers of Twitter
received additional equity in X AI.
In addition to Anderson, Horowitz and Sequoia Capital,
other notable investors in the Series B round include Valor
Equity VI Capital, Prince Alwaleed bin Talal in Kingdom
Holding. It's a diverse group and there's
broad interest in XA is potential, and there's potential
to make a lot of money now. XAI has not disclosed specific
plans for the new funding. However, recent reports from The
Information suggest that the company aims to build a massive
new supercomputer, referred to as the Gigafactory of Compute,
possibly in collaboration with Oracle.
And the potential supercomputer, as reported, would significantly
exceed the capacity of existing GPU clusters.
The project would involve Nvidia's high demand H 100
graphics processing units, which are essential for data center
operations and AI development. Now, going back to Grok, the
Grok 2 model required approximately 20,000 NVIDIA H100
GPU's for training, according to Elon.
Future models such as Grok 3 will necessitate even more, with
estimates suggesting up to 100,000 NVIDIA H100 chips now.
Musk's establishment of X AI last year was for a creation of
a formidable competitor to Microsoft backed Open AI and
Google's AI endeavors. His departure from Open AI and
subsequent legal actions show that there's ongoing tensions
within the AI research community.
And there's a battle going on, and it's great for all of us
because we get better products out of it.
Now. Bringing AI products to market
is complex, even for leading tech firms and even for Elon
Musk. It takes a lot of money and a
lot of time and a lot of very talented people to do this.
Now, Google's recent introduction of an AI generated
search tool faced criticism for delivering inaccurate
information. And this shows that it's very
difficult to get these things right.
Investment in AI has surged. It's sort of likethe.com bubble
from earlier, but I don't think it's going to be a bubble.
It is not financial advice, by the way, that is driven by the
potential for these technologies to transform various aspects of
our lives, make life a lot easier and work a lot easier
too. And major companies like
Microsoft and Amazon have made significant investments in AI
firms, billions of dollars. And there's potential for
transformative technologies here.
And as Open AI and XAI continue to compete, XAI is getting more
funding, billions of dollars is poised to advance his
technological capabilities and market presence within the next
six months. The new developments and further
announcements from Musk will shape the trajectory of XAI and
also their competitors in the coming years.
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