We are talking about Musk Raised $6B, Funding For AI Startup That Will be The Rival of OpenAI:
Musk created an artificial intelligence startup 10 months ago to let researchers work on existential problems. He also mentioned joining the startup with the widely known social Media platform X (formerly known as Twitter). Later, xAI unveiled an AI chatbot exclusively available for X’s premium subscribers known as Grok. xAI is a startup company building artificial intelligence to accelerate human scientific discovery, focusing on advancing collective understanding of the universe. We are discussing Musk Raised $6B, Funding For AI Startup That Will be The Rival of OpenAI.
$6B funding for a startup may sound a bit unbelievable, but looking at the technical team members, you will know why investors trust them with their money. “Grok,” The AI chatbot available in X (formerly known as Twitter) for premium users in partnership with xAI, was developed quickly. The reason is simple: it is a team in demand with the absolute best programmers working with Musk. Now, let’s take a little peek at the members working for xAI. Elon Musk, CEO of Tesla and SpaceX, leads the startup.
Other technical team members have also worked at DeepMind, OpenAI, Google Research, Microsoft Research, Tesla, and the University of Toronto. These members introduced all these innovative techniques and analyses, such as Transformer-XL, Autoformalization, the Memorizing Transformer, Batch Size Scaling, μTransfer, and SimCLR. In addition, they have worked on and led the development of some of the largest breakthroughs in the field, including AlphaCode, Inception, GPT-3.5, and GPT-4. Now you know why everyone wanted to get a share in this “startup.”
With X already being a shareholder, the deal for xAI was originally supposed to rise to $3B, but due to a sudden perk of interest from investors and the general public, the price was raised. The startup is said to be raising $6B on a pre-money valuation of $18B.
The deal for investors to get a quarter of the company will close soon. In addition, Jared Birchall, the known head of Musk’s family office, told investors about xAI raising $3B at a pre-money valuation of $15B a few weeks ago. However, a sudden rise in investors trying to get into the deal doubled those numbers. According to the Financial Times, Musk is looking for up to $6 billion in funding.
Everyone knows by now that the main objective of xAI is to connect the digital and physical worlds. Still, not many know that Musk planned to do this by getting training data from his own companies, including X, SpaceX, Neuralink, and Tesla. As explained earlier, X(Twitter) is already a shareholder of xAI and has an AI chatbot named Grok. Another investor would be Tesla; they have been working with AI for a long time, focusing on “ self-driving cars” and “Optimus, “The humanoid robot
designed by Tesla.” Tesla has some specific use cases, and Tesla data is valuable; now, whether the shareholders of Tesla will allow the sharing of data or not is a whole other story, but Elon, in general, wants to use the data of these companies for the xAI. X also owns a share in xAI, which means the overall performance of xAI will automatically boost the social media platform.
Musk co-founded Open AI in 2015 but left the board after 4 years due to disagreements. Later, OpenAI became the fastest-growing startup in history. The rivalry between the two is publicly known by many, as Musk once sued OpenAI’s CEO for moving from their original “non-profit” goal to “for-profit.” Last month, Elon open-sourced the architecture of Grok-1 (the earliest chatbot for xAI), another step in Musk’s efforts to distinguish it from Open AI.
FAQ’s
What is xAI, and when was it founded?
xAI is an artificial intelligence startup created by Elon Musk approximately 10 months ago. The company focuses on addressing existential problems through AI research.
How is the social media platform X involved with xAI?
Elon Musk mentioned collaborating with the social media platform X (formerly Twitter) for xAI. As part of this partnership, xAI introduced an AI chatbot named Grok, which is exclusively available to X’s premium subscribers.
What was the initial funding target for xAI, and how did it change?
xAI’s funding target was originally set at $3 billion. However, due to increased interest from investors and the public, it was raised to $6 billion.
What is the pre-money valuation of xAI?
xAI is raising funds at a pre-money valuation of $18 billion, with investors expected to acquire a quarter of the company.
Who are some notable investors in xAI?
Besides the social media platform X, Optimus, a humanoid robot designed by Tesla, is also said to be an investor in xAI. This indicates strategic partnerships with Musk’s other companies.
How does xAI plan to bridge the digital and physical worlds?
Musk intends to gather training data for xAI from his companies, including X, SpaceX, Neuralink, and Tesla. This approach aims to connect the digital and physical world through AI technology.
Can we take startup funds from the government in India?
YES! The government has initiated a few loan schemes, such as the Startup India Seed Fund Scheme and SIDBI Fund of Funds, to provide collateral-free debt to aspiring entrepreneurs and help them access low-cost capital. A list of government schemes can be found here.
What are the criteria for startup funding?
Concerned startups must work to develop, deploy, or commercialize any product or service that is driven by the latest technology or intellectual property. Startups must aim to improve an existing product or create a new one to enhance customer value or workflow.
What is the 20 lakh grant for startups in India?
Up to Rs. 20 Lakhs as a grant to validate Proof of Concept, prototype development, or product trials. The grant shall be disbursed in milestone-based installments. These milestones can relate to prototype development, product testing, building a product ready for market launch, etc.
Who is eligible for an MSME grant?
The beneficiary unit(s) must typically be registered micro, small, or medium enterprises as per the definition in MSMED and should have a valid UAM or Udyam Registration. The manufacturing MSMEs may be a profitable entity preferably in the last 1 year of its operations, PMAC can relax the criteria. You can check more schemes here.
Conclusion
Elon Musk’s AI startup, established just 10 months ago, aims to address existential challenges through advanced AI research. With a collaboration with X (formerly Twitter), xAI aims to connect digital and physical worlds. An exceptional technical team, including DeepMind, OpenAI, and Google Research members, backed the $6 billion funding. Musk’s strategic vision of utilizing training data from his companies underscores the ambitious goals of xAI. As the funding round nears closure, the industry awaits the transformative impact of xAI’s endeavors under Musk’s leadership.
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