Musk Raising $3 Billion for xAI Artificial Intelligence After Denial in January

Musk like to promise things he has no chance of delivering in the time frame he claims. Here is a denial of something that is underway.

Elon Musk’s xAI to Raise $3 Billion

The Wall Street Journal reports Investors in Talks to Help Elon Musk’s xAI Raise $3 Billion, Adding to Industry Arms Race

Investors close to Elon Musk are in talks to help xAI raise $3 billion in a round that would value the tycoon’s artificial-intelligence startup at $18 billion, people familiar with the matter said.

The venture-capital firm Gigafund and Steve Jurvetson, a prominent Musk backer and co-founder of another venture firm, are among the backers considering investing in the round, the people said.

Jurvetson is a longtime Musk friend who sits on the board of his rocket company, SpaceX, and was a director at Tesla until 2020. Gigafund was co-founded by Luke Nosek, also a SpaceX director, who like Musk is a member of the “PayPal mafia” group that started the payments company. Musk and Nosek together once tried to buy DeepMind, the AI company that is now part of Google.

The proposed fundraising marks another escalation in the artificial-intelligence arms race. Leading AI startups have raised billions of dollars in recent years to fund the computing resources needed to train advanced large language models, the technology powering generative AI chatbots.

ChatGPT-creator OpenAI has secured $13 billion in committed funding from Microsoft, while its rival, Anthropic, raised over $6 billion.

With xAI, Musk has been playing catch-up with his more well-funded rivals. He launched xAI publicly in July, making some investors skeptical that it has enough time to compete with other leading AI firms. The startup released its chatbot, Grok, in November and made it available to subscribers on his social-media platform, X. Last month, xAI introduced its latest AI model, called Grok-1.5, and said it would soon be available to early testers and existing Grok users.

A December securities filing showed that xAI was looking to raise $1 billion and had already secured nearly $135 million from four investors. It couldn’t be determined if that fundraising is a part of the current negotiations.

Musk filed in December a plan to raise $1 billion then he denied that in January.

I fail to understand What Musk thinks he gains by such maneuvers. In the early years, OK. But what kind of trust does this inspire now?

Is xAI Nonprofit?

Musk co-founded OpenAI as a nonprofit research lab in 2015 with its current CEO, Sam Altman, but left that company several years later after a dispute over control. Tensions between the two men spilled into the open recently when Musk sued OpenAI and Altman, alleging that they had abandoned OpenAI’s initial mission in pursuit of profit.

Musk Lawsuit Over OpenAI

On February 29, 2024 Musk Filed a Lawsuit on Open AI.

I find the lawsuit humorous. Here are some snips, emphasis mine.

Mr. Musk has long recognized that AGI [artificial general intelligence] poses a grave threat to humanity—perhaps the greatest existential threat we face today. His concerns mirrored those raised before him by luminaries like Stephen Hawking and Sun Microsystems founder Bill Joy. Our entire economy is based around the fact that humans work together and come up with the best solutions to a hard task. If a machine can solve nearly any task better than we can, that machine becomes more economically useful than we are. As Mr. Joy warned, with strong AGI, “the future doesn’t need us.” Mr. Musk publicly called for a variety of measures to address the dangers of AGI, from voluntary moratoria to regulation, but his calls largely fell on deaf ears.

Mr. Altman approached Mr. Musk with a proposal: that they join forces to form a non-profit AI lab that would try to catch up to Google in the race for AGI, but it would be the opposite of Google. Together with Mr. Brockman, the three agreed that this new lab: (a) would be a nonprofit developing AGI for the benefit of humanity, not for a for-profit company seeking to maximize shareholder profits; and (b) would be open-source, balancing only countervailing safety considerations, and would not keep its technology closed and secret for proprietary commercial reasons (The “Founding Agreement”). Reflecting the Founding Agreement, Mr. Musk named this new AI lab “OpenAI,” which would compete with, and serve as a vital counterbalance to, Google/DeepMind in the race for AGI, but would do so to benefit humanity, not the shareholders of a private, for-profit company (much less one of the largest technology companies in the world).

Mr. Musk became increasingly concerned about the potential of AI to become super-intelligent, surpass human intelligence, and threaten humanity.

OpenAI, Inc. was publicly announced on December 11, 2015. In the announcement, Mr. Musk and Mr. Altman were named as co-chairs and Mr. Brockman was named as the CTO. The announcement emphasized that OpenAI was designed to “benefit humanity,” and its research would be “free from financial obligation”: OpenAI is a non-profit artificial intelligence research company. Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return. Since our research is free from financial obligations, we can better focus on a positive human impact.

While OpenAI, Inc. was once a pioneer of safe, responsible development of AGI based on open communication with the public, it has now shut its doors, brought the biggest investor of its for-profit subsidiary onto a Board which owes its only fiduciary duty to humanity, and continues in secrecy towards a profit-centric future with possible calamitous implications for humanity. Mr. Musk founded and funded OpenAI, Inc. with Mr. Altman and Mr. Brockman in exchange for and relying on the Founding Agreement to ensure that AGI would benefit humanity, not for-profit corporations. As events turned out in 2023, his contributions to OpenAI, Inc. have been twisted to benefit the Defendants and the biggest company in the world. This was a stark betrayal of the Founding Agreement, turning that Agreement on its head and perverting OpenAI, Inc.’s mission.

Imagine donating to a non-profit whose asserted mission is to protect the Amazon rainforest, but then the non-profit creates a for-profit Amazonian logging company that uses the fruits of the donations to clear the rainforest. That is the story of OpenAI, Inc.

Legal Remedies

The lawsuit accuses the defendants of “unfair and improper practices”.

It requests an “order requiring that Defendants continue to follow OpenAI’s longstanding practice of making AI research and technology developed at OpenAI available to the public.”

It also requests “An order prohibiting Defendants from utilizing OpenAI, Inc. or its assets
for the financial benefit of the individual Defendants, Microsoft, or any other particular person or entity.”

Musk demands a trial by jury and seeks “pre-judgment and post-judgment interest at the maximum legal rate.”

Meanwhile, Musk is raising bullions of dollars for xAI, hoping for an $18 billion evaluation.

If there is no financial benefit, why would investors contribute a dime?

Reuters Reports Tesla to Scrap $25,000 Entry EV, Musk Cries Liar

Yesterday, I reported Reuters Reports Tesla to Scrap $25,000 Entry EV, Musk Cries Liar

In summation, the Reuters article was very detailed and specific. The article claimed Musk would drop his decades-long promise to develop an entry-level EV for under $25,000, and instead concentrate on a “robotaxi”.

The Reuters article noted four confirming, but unnamed sources, citing an internal Tesla meeting. If Reuters mentioned the names, the persons would have been fired.

Musk fired back “Liar” with no other details.

Liar

Minutes later, Musk Tweeted that he would announce his plans for a robotaxi on August 8.

Tesla’s Deliveries Drop for First Time Since 2020, It’s Demand Not Supply

On April 2, I commented Tesla’s Deliveries Drop for First Time Since 2020, It’s Demand Not Supply

RoboTaxi Zero Chance

Tesla has the worst autonomous driving capabilities around. I will do a separate report on where the technology stands.

Meanwhile, I await Musk’s August 8 robotaxi announcement. Expect to be underwhelmed and overpromised. A Tesla robotaxi is not close to being ready. Waymo is here and now.

It’s a Cult

The number of people standing up for Musk on Twitter with belief in the robotaxi speaks of cult-like allegiance.

I consider Musk a genius. But at best he overpromises and underdelivers for years on end, especially with autonomous driving, but also semis, the M2, and the cybertruck.

I did intend to write more on robotaxis, and will do so. This article on xAI came first.

I ask again, for all of Musk’s moaning about nonprofits, is Musk raising money to make a profit or not?

Perhaps Musk envisions himself as the only person who can save humanity while making a profit on AI, and without destroying the world in the process.

xAI is going nowhere. It is too far behind. Just don’t tell any member of the cult.