Elon Musk’s xAI raises $6B to take on OpenAI

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At present, Elon Musk’s xAI startup introduced an enormous $6 billion spherical of funding.

Confirming experiences from April, the collection B funding comes from the participation of a number of recognized enterprise capital corporations and buyers, together with Valor Fairness Companions, Vy Capital, Andreessen Horowitz (A16z), Sequoia Capital, Constancy Administration & Analysis Firm, Prince Alwaleed Bin Talal and Kingdom Holding, amongst others.

Musk mentioned the funding has been raised at a pre-money valuation of $18 billion.

Whereas it isn’t unusual to see large rounds and valuations for younger startups within the AI area, this improvement is exclusive because of the sheer measurement of the capital concerned – presumably one of many largest collection B investments ever made within the class.

xAI, which has been transferring aggressively with its Grok-1 mannequin and chatbot, hopes to make use of the cash to speed up its work and higher tackle OpenAI, Anthropic, Google and others within the race for synthetic generalized intelligence (AGI).

“There might be extra to announce within the coming weeks,” Musk wrote on X.

Musk’s aggressive push with xAI and Grok

Notably, Musk co-founded OpenAI alongside its present CEO Sam Altman and president Greg Brockman and others again in 2015 however broke with the company over its priorities and direction in 2018, leaving it and in the end turning into one among its staunchest critics — particularly over its transfer away from open supply AI fashions and towards “closed” or proprietary fashions to which it sells entry.

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Musk formally re-entered the generative AI area with the announcement of xAI in July final yr. Since then, the corporate has been transferring aggressively in direction of constructing superior AI techniques which might be “truthful, competent, and maximally helpful for all of humanity.”

The corporate launched Grok-1 in November 2023, saying the AI has been modeled after “The Hitchhiker’s Information to the Galaxy” and might reply virtually something to help humanity in its quest for understanding and information – no matter background or political opinions.

On benchmarks akin to GSM8K, HumanEval and MMLU, shared by xAI, Grok-1 outperformed Llama-2-70B and GPT-3.5 however lagged behind main fashions akin to Anthropic’s Claude3, OpenAI’s GPT-4, Google’s Gemini, and Meta’s open supply Llama 3.

Over the following months, the corporate expanded entry to the mannequin by way of Grok chatbot – making it accessible to paying Premium and Premium+ subscribers on Musk’s separate social community X – and highlighted the way it can present solutions utilizing the newest information from X posts whereas being witty, humorous or sarcastic on the similar time. Even

Musk saved highlighting Grok’s distinctive humorousness, regardless of many flagging cases of hallucinations on the similar time.

In March this yr, the corporate once more began shifting gears. It first made Grok-1 open-source after which launched its better-performing successors — Grok-1.5 and Grok-1.5V.

Grok-1.5 launched enhanced reasoning and problem-solving capabilities and closed in on the efficiency of recognized open and closed LLMs, together with GPT-4 and Anthropic’s Claude 3.

In the meantime, Grok-1.5V added multimodality with the flexibility to grasp issues seen in paperwork, diagrams, charts, screenshots and pictures. Across the similar time, The Information reported that the corporate is in talks with buyers to boost $6 billion.

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Now, with the funding formally introduced, xAI is anticipated to apply it to graphics processing unit (GPU) clusters in addition to hiring to boost the capabilities of Grok.

That will make it a extra direct competitor for OpenAI’s ChatGPT, which lately acquired an enormous improve with a brand new GPT-4o mannequin that causes throughout textual content, voice and imaginative and prescient in real-time. Google too has been pushing the bar on Gemini’s multimodal capabilities. 

“xAI will proceed on this steep trajectory of progress over the approaching months, with a number of thrilling know-how updates and merchandise quickly to be introduced. The funds from the spherical might be used to take xAI’s first merchandise to market, construct superior infrastructure and speed up the analysis and improvement of future applied sciences,” the corporate wrote in a weblog publish.

An xAI supercomputer by 2025?

Whereas it stays to be seen what updates to Grok are within the pipeline, the work on the infrastructure aspect is more likely to revolve round an enormous supercomputer. In line with one other report by The Information, Musk informed buyers that he needs to get this GPU cluster or “gigafactory of compute” prepared by the autumn of 2025.

The system will reportedly use Nvidia’s H100 GPUs and could be a minimum of 4 instances the scale of the most important GPU clusters which were constructed to coach and run highly-performant AI fashions, he mentioned. 

Notably, OpenAI and Microsoft are additionally reported to be planning an enormous AI supercomputer. In line with preliminary estimates, the mission, dubbed Stargate, will use thousands and thousands of specialised chips to energy OpenAI’s fashions and will price as much as $100 billion. Again in March, Musk sued OpenAI for abandoning its founding mission and changing into a closed-source de-facto subsidiary of Microsoft creating AGI for income somewhat than the good thing about humanity.

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