Daily Digest: Big bucks for xAI

PLUS: US gov adds tech CEOs on AI safety board

April 26, 2024

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Hello folks, here’s what we have today;

PICKS

  1. New tutorial is up on Ben’s Bites: Build a marketing analyst GPT. This one is beginner-friendly and helps you to make smart marketing recommendations from consumer data.

  2. Elon Musk is raising $6B for xAI. Elon Musk's AI startup, xAI, is finalizing a $6B investment round that values the company at $18B. Sequoia Capital is a confirmed investor, and the round is likely to close within a couple of weeks.🍿Our Summary (also below)

  3. US Government creates an AI safety board with dozens of CEOs, researchers and politicians. Big players like Sam Altman (OpenAI) and the CEOs of Microsoft, Google, and Nvidia are in the mix. This board will team up with the Department of Homeland Security on safe AI deployment.

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Elon Musk's AI startup, xAI, is finalizing a $6 billion investment round that values the company at $18 billion. Sequoia Capital is a confirmed investor, and the round is likely to close within a couple of weeks.

What is going on here?

xAI is on the lookout for $6 billion in funding.

What does this mean?

That's the kind of cash that makes you choke on your morning coffee.

This new number is double the previously discussed funding figures for xAI. The last funding round of $1 billion for xAI was primarily financed by Elon Musk, but now external investors (like Sequoia, who back OpenAI too) are joining the mix. Valor Equity Partners and Vy Capital are expected to join as well.

The funding will be used to advance xAI's chatbot, Grok, making it a stronger rival to ChatGPT. xAI is also actively attracting engineers, including some from Tesla.

Why should I care?

With Elon Musk’s name in the mix, $18B feels like a small number but to bring that in context, OpenAI is now valued at $86B and Twitter (X) was bought for $44B. In short, this bet from investors is huge.

And they might not be wrong. A lot of folks wrote Grok off as just a meme-spouting chatbot, thanks to Elon’s marketing. But Grok 1.5 (unreleased) looks like a great AI model and the slick 'X' integration with trending topics is also going well. xAI has great AI talent and a relentless Elon. It’s never a good idea to bet against Elon.

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