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xAI, Elon Musk’s artificial intelligence company, has He grew up $6 billion, according to a filing with the U.S. Securities and Exchange Commission on Thursday.
Investors provided at least $77,593 per deposit (97 people participated, but the document did not reveal their identities). Formerly The Wall Street Journal I mentioned Valor Equity Partners, Sequoia Capital and Andreessen Horowitz are expected to contribute to the round, along with the Qatar Investment Authority, Qatar’s sovereign wealth fund.
The new cash brings xAI’s total amount raised to $12 billion, adding to the $6 billion xAI tranche raised this spring. CNBC I mentioned Last November, xAI was aiming for a $50 billion valuation, double its valuation six months earlier.
According to According to the Financial Times, only investors who backed xAI in its previous fundraising round were allowed to participate in this round. Investors who helped fund Musk’s acquisition of Twitter were reportedly introduced access Up to 25% of xAI shares.
Intensifying artificial intelligence
Musk founded XAI last year. Shortly after, the company released its groundbreaking Grok AI model that now powers a number of features on the X, including a chatbot that X Premium subscribers and free users can access in some regions.
Grok has what Musk described as a “rebellious streak” — a desire to answer “interesting questions that most other AI systems refuse to do.” For example, if you’re told that Grok is going to be vulgar, he’ll gladly oblige, spewing profanity and colorful language that you wouldn’t hear from ChatGPT.
Musk has it He mocked ChatGPT and other AI systems for being “woke” and “politically correct”, despite Grok’s system – Not wanting to exceed certain limits and Hedging On political topics. He also referred to Grok as “truth-seeking to the utmost extent” and less biased than competing models, although there are certificate To indicate that your puppy is leaning to the left.
Over the past year, Grok has become increasingly entrenched in X, the social network formerly known as Twitter. At launch, it was your puppy only Available for X-users and developers skilled enough to run the “open source” version.
Thanks to integration with the open image builder Flux, Grok can create images on the X (without guardrails, which is controversial). The model can also analyze images and summarize trending news and events (Incompletelymind).
Reports indicate that Grok may handle more X functionality in the future, from enhancing X’s search capabilities and account bios to helping with post analytics and reply settings.
xAI is playing catch-up with strong competitors like OpenAI and Anthropic in the generative AI race. The company launched an application programming interface (API) in October, allowing customers to build Grok into third-party apps, platforms, and services. According to the Wall Street Journal, xAI is preparing to release a standalone consumer app similar to OpenAI in December.
Musk asserts that it was not a fair fight.
In a lawsuit filed against OpenAI and Microsoft, a close OpenAI collaborator, Musk’s lawyers accuse OpenAI of “actively trying to eliminate competitors” like xAI by “extracting promises from investors.” Not to fund themMusk’s lawyer says OpenAI is also taking unfair advantage of Microsoft’s infrastructure and expertise in what lawyers describe as a “de facto merger.”
However, Musk often says that X’s data gives xAI an advantage over competitors. Last month, X changed its privacy policy to allow third parties, including xAI, to train models on X posts.
It is worth noting that Musk was one of the original founders of OpenAI, and left the company in 2018 after disagreements over its direction. He has argued in previous lawsuits that OpenAI benefited from his early involvement, but has backed away from the nonprofit’s pledge to make the fruits of its AI research available to everyone.
xAI ecosystem
xAI has outlined a vision whereby its models would be trained on data from Musk’s various companies, including Tesla and SpaceX, and its models could then improve the technology across those companies. It already powers customer support features for SpaceX’s Starlink internet service, according to the Wall Street Journal, and the startup is… He said To hold talks with Tesla to provide research and development in exchange for some of the automaker’s revenue.
Tesla shareholders, for example, object to these plans. Many have filed a lawsuit against Musk over his decision to start XAI, arguing that Musk did Transform both talent and resources From Tesla to what is essentially a competing project.
However, the deals — and xAI products for developers and consumer-oriented products — brought xAI revenue to about $100 million annually. For comparison, anthropic is It is said On pace to achieve $1 billion in revenue this year, OpenAI is targeting $4 billion by the end of 2024.
Musk said this summer that xAI is training the next generation of Grok models at its data center in Memphis, which was apparently built in just 122 days and is currently powered in part by portable diesel generators. The company hopes to upgrade the server farm, which contains 100,000 Nvidia GPUs, in the next year. (Because of their ability to perform many calculations in parallel, GPUs are the chips of choice for training and running models.)
In November, XAI won consent from the Memphis Regional Power Authority for 150 megawatts of additional power – enough to power nearly 100,000 homes. To win the agency, xAI pledged to improve the quality of the city’s drinking water and supply Memphis’ grid with Tesla-manufactured batteries at discounted prices. But some residents criticized the move, saying it would strain the grid and Get worse Air quality in the area.
Tesla too expected To use the upgraded data center to improve self-driving technologies.
xAI has expanded very rapidly from an operations standpoint during the year since its founding, growing from just ten employees in March 2023 to More than 100 today. In October, the startup moved into OpenAI’s old offices in San Francisco’s Mission District.
xAI has reportedly told investors that it plans to raise more money next year.
It won’t be the only AI lab raising huge amounts of money. Anthropic recently secured $4 billion from Amazon, bringing the total amount raised to $13.7 billion, while OpenAI raised $6.6 billion in October to grow its war chest to $17.9 billion.
Mega deals like OpenAI’s and Anthropic’s pushed AI venture capital activity to $31.1 billion across more than 2,000 deals in Q3 2024. per Beachbook data.
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