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Hey everybody, welcome back to 
the Elon Musk Podcast. 

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This is a show where we discuss.
The Critical. 

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Crossroads the shape SpaceX 
Tesla X. 

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The Boring Company. 
And Neurolink, I'm your host, 

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Will Walden. 
XAI just locked in $10 billion 

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in new funding. 
At a $200 billion valuation, 

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it's double where it stood four 
months ago. 

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The speed of that jump raises 
one pretty big question. 

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What exactly are investors 
paying for right now? 

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Elon Musk has now secured the 
second largest private valuation

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and AI behind Open AI. 
This new route, which includes 

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participation from Valor Equity 
Partners, VI Capital, Anderson 

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Horowitz, Sequoia Capital, and 
Fidelity, puts XAI ahead of 

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Anthropic and Inflection by a 
huge margin. 

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The funding is expected to close
in the coming weeks, though XAI 

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hasn't commented about this. 
The group of investors looks 

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nearly identical to the ones 
that backed Musk's earlier. 

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Ventures especially. 
SpaceX and Tesla. 

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That familiarity likely helped 
compress timelines and inflate 

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the valuation. 
Now investors are betting on two

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things. 
Musk's influence and XA is 

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tight. 
Integration with XXAI runs Grok.

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That's the chatbot on X. 
And Grok is already absorbing 

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real time content from X. 
Of course that creates a self 

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reinforced data loop. 
Grok learns from X, responds to 

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X users, and shapes the activity
on the platform. 

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And no other AI startup has that
level of user engagement built 

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into consumer facing products. 
That loop there now the $200 

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billion price tag reflects that 
built in user base more than any

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specific product milestone. 
Unlike Open AI or Anthropic, XAI

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hasn't released benchmark 
comparisons for Grok show it 

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beating competitors across 
widely accepted test sets. 

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Instead, it is focused on open 
sourcing earlier versions and 

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shipping frequent updates more 
recently, Croc 2.5. 

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Now, that model arrived in June 
and matched GPD 4 on multiple 

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tasks, though it still trails in
more complex reasoning and code 

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generation than the others. 
Now, open source also plays a 

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central role in how Musk is 
positioning XAI. 

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The company has released the 
weights and architecture for 

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several versions of Grok, 
including the tokenizer and 

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training setup. 
How that move attracts 

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researchers and developers who 
want to build on top of XAI's 

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work. 
And it gives XAI access to 

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community driven improvements 
without hiring everyone 

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directly. 
And Musk has framed openness as 

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a necessity to avoid centralized
control of AI. 

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It also sets XAI apart from open
AI to stop releasing weights for

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its best models after just GPT. 
2X AI's financial strategy 

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mirrors what Musk is done with 
Tesla and SpaceX. 

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Raise a butt load of money, 
aggressively attach long term 

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growth stories and ignite short 
term profitability. 

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Now, this round is reportedly 
structured as a tender offer, 

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meaning investors are buying 
existing shares rather than 

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injecting injecting fresh 
capital. 

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Now that implies early Sai 
shareholders, including Musk 

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himself, are cashing out some of
their stakes at the new 

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valuation while still holding on
to long term upside. 

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The company now plans to build 
its own supercomputer to support

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future versions of Crock. 
Earlier this year, Musk 

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announced that XAI would build a
system with 100,000 NVIDIA each 

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100 GPU's. 
It's nearly five times larger 

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than what Meta is currently 
running, and it would rank among

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the largest AI compute clusters 
in the world. 

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And Musk wants it operational by
the end of this year. 

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And it's there, pretty much if 
that timeline holds up, though, 

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if they get this done and it's 
perfect. 

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Would give XAI unprecedented 
hardware independence, 

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especially when combined with 
X's data firehose. 

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Now, unlike Open, AIXAI is 
tightly bound to a single 

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ecosystem. 
Everything is built and is 

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routed through X. 
That gives it a data advantage, 

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but also increases its platform 
risk. 

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If X continues to bleed users or
struggle with ad revenue, that 

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drag could bleed into XA is 
momentum. 

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And at the same time, if Croc 
continues improving and X 

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regains relevance as an AI 
native platform, this flywheel 

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spins faster. 
XAI becomes the first company 

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for social media, and frontier 
models evolve inside the same 

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product. 
This funding around makes clear 

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that the bet isn't just on AI 
performance, though, It's on 

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Musk's ability to turn a medium 
platform into a huge data 

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engine. 
The strategy still has major 

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gaps, so Grok doesn't yet 
outperform Claude or GPD 4 in 

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most head to head evaluations. 
It lacks enterprise tools, 

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developer API's, or productivity
integrations that competitors 

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have used to lock in users for a
long time. 

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But none of that seems to matter
to the investors buying in now. 

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Musk has already merged XAI and 
X Corp into a single company as 

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well. 
That move lets him shift 

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resources, staff, and product 
updates between teams without 

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regulatory friction. 
It also blurs the line between 

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social media and also the model 
lab that's going on at XAI. 

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Now Grok gets a built in user 
base, X gets an AI layer, and 

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the two grow together. 
All together now, this run gives

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XAI more capital than any AI 
startup has ever raised in a 

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single. 
Go also sets expectations that 

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Grok will close the gap when 
rivals quickly try to take them 

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out. 
Investors aren't waiting for it 

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to catch up, though. 
They're betting that the 

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combination of Musk X and open 
source Momentum will let it 

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bypass traditional AI race 
dynamics entirely. 

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Hey, thank you so much for 
listening today. 

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I really do appreciate your 
support. 

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If you could take a second and 
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It helps out the show 
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