Elon Musk’s artificial intelligence startup, xAI, has secured $6 billion in funding as part of the Series B funding round. The cash infusion is deemed to close the capital gap between the company and its rivals in the AI industry. The funds will fuel the debut of xAI’s initial products, the construction of advanced infrastructure, and the acceleration of future technological research.
“There will be more to announce in the coming weeks,” Musk said on X (formerly Twitter). Investors included Silicon Valley heavyweights such as Andreessen Horowitz, Fidelity Management & Research Company, and Sequoia Capital, along with Saudi Arabia’s Prince Alwaleed bin Talal. Major tech corporations like Google, Meta, and Microsoft have invested billions in AI systems, aiming to profit as they integrate into various facets of business and daily life.
This news comes in the backdrop of Musk’s aim to finalize additional funds that could significantly boost xAI’s already massive valuation. While xAI had originally planned a more modest $6 billion funding round, there was news of reshaping those plans into a restructured $6.5 billion injection aimed at catapulting the company further ahead. However, the Series B funding round valued the company at $18 billion, excluding the new pre-money capital. Now, with post-money funding, xAI is worth $24 billion. Elon Musk announced the news on his social media platform, X.
Skipping the Traditional AI Route
Last month, Musk delved into xAI’s goals at the Viva Technology Congress in Paris. He stressed the absolute necessity for precision within the company and vehemently denounced political correctness. He mentioned that political correctness has set back the progression of AI and remains liberal-biased to the core while taking a jibe at Google, OpenAI, and other such organizations.
In addition, Musk highlighted how xAI’s primary goal was to emerge as the most engaging and accessible AI. This coincides with the business’s overarching aim to push boundaries in the AI domain, which revolves around the development of novel and entertaining artificial intelligence technologies that are distinct from mainstream products.
Elon Musk played an important role in shaping OpenAI early on and was among its founding cohort. However, Musk eventually parted ways with OpenAI’s founding members in early 2018 and lodged a legal complaint against OpenAI in March this year. His own startup, xAI, appears to be embracing OpenAI’s philosophy that “the bigger you build it, the smarter it will become.”
Since then, the trajectory of xAI’s divergence from conventional AI development into uncharted technological waters has been rapid and thought-provoking. This has been visible from their launch in July 2023, the release of their Grok-1 model on the system in November last year, and recent announcements of enhanced Grok versions with extended contextual knowledge and visual comprehension.
xAI’s current funding and development goals seem to be in complete contrast to OpenAI’s CEO Sam Altman’s current pursuit of raising trillions of dollars to fund increased chip-making infrastructure for upcoming advancements in AI. Sam Altman is weighing more to take over the AI chip industry and compete with Nvidia in the race, whereas Musk’s focus still remains on holistic AI development.
Musk Leads AI, But Where To?
AI controversies have been rampant since the start of the year, with Google’s generative AI feature causing online dissent over improper image generation. OpenAI, similar to Microsoft, has faced criticism for privacy and security. Netizens are fretting over the uncertainties surrounding these AI ventures.
With competitors eager to enter the AI assistant market, many see xAI as their final hope under Musk’s leadership before alternatives emerge. However, doubts persist concerning xAI’s viability in light of Musk’s tumultuous Twitter takeover in 2022. According to reports, daily mobile users plunged 16% on his watch, while X’s valuation crashed to a measly $20 billion from its original $44 billion valuation.
Now, as Musk focuses energies on xAI, many question if a similar fate awaits this ambitious endeavor. Only time will tell if xAI can avoid Twitter’s downfall and deliver on its lofty promises under Musk’s stewardship. However, one thing is for sure—no matter who leads the AI race, AI technology is here to stay and will be a part of our everyday lives!
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