Elon Musk's startup xAI aims to raise $1 billion

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Competition is fierce, but the xAI startup doesn't look like it's going to stop. According to an SEC filing, Elon Musk's startup wants to raise at least $1 billion. To date, about $135 million has already been officially raised. Whether these funds will help the company to truly enter the market is still unknown.

The startup xAI, launched by Elon Musk earlier this year, is still keeping a low profile, but is gaining momentum. A document filed with the U.S. Securities and Exchange Commission (SEC) indicates that the artificial intelligence company is looking to raise funding. The document also states that "the issuer has entered into a binding and enforceable agreement to purchase and sell the entire amount remaining to be sold set forth above". This could mean that the full amount required has already been raised. Although we don't know the names of the investors, we know from this document that there are 4 of them. Recall that the Twitter boss officially created the company on March 9. "Several people are investing in this project. It is real and people are enthusiastic about it", a source close to the matter said at the time.

For this AI project, Elon Musk is rumored to have purchased thousands of GPU gas pedals and hired engineers from leading AI labs, particularly DeepMind. Through this company, the businessman intends to compete with OpenAI, which he co-founded in 2015. Having taken over the company, Elon Musk intends to manage it as he sees fit. In November, he announced that xAI's mission is to "understand the true nature of the universe". In his Twitter (now X) post, he also said: "Tomorrow xAI will present its first AI to a select group" and added: "In many ways, it's the best there is".

Chatbot Grok, a not-so-scary competitor to ChatGPT

Early last month, xAI unveiled the Grok chatbot, a "conversational AI for understanding the universe". In a blog post, the team working on this LLM writes, "Grok is an AI inspired by The Galactic Traveler's Guide (note: a science fiction book by Douglas Adams), designed to answer almost all questions and, even more challenging, suggest which questions to ask". However, this LLM has a few differences from its counterparts. Grok is designed to answer questions with a dose of wit and has a rebellious streak, so don't use it if you hate humor". The tool also runs on the X platform in real time and can "answer 'racy' questions that are rejected by most other artificial intelligence systems".

Such wording may be surprising, especially after Elon Musk's statements on the topic of generative AI. Along with other researchers and key figures in the AI ecosystem, Musk called for a six-month pause in generative AI research, and more specifically, in "training models more powerful than GPT-4". Such a pause was justified on the grounds that these systems "could pose profound risks to society and humanity". A way to buy time from competitors? The fact is that startup xAI has continued to work hard in recent months to catch up with the market.

Attracting investors to both X and xAI

This company is also a way to attract investors to the web of business he's weaving. On Nov. 19, he said on X's website that "X Corp investors will own 25% of xAI". While artificial intelligence may be attractive, the social network has been losing momentum and appeal since the billionaire took over. In particular, advertisers, aware of the vast amount of misinformation circulating on the social network, have abandoned it. Therefore, Elon Musk has to be resourceful to find other sources of funding. At the moment, it seems that the direction chosen by the X boss is fraught with pitfalls.

Jonathan Rowe

Jonathan Rowe

The creator and main author of the site is Jonathan Rowe. Trader and investor with many years of experience. A graduate of the Massachusetts Institute of Technology with over a decade of experience developing applications for financial and investment institutions.

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