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xAI announces series B funding round of $6B

163 points| frisco | 1 year ago |x.ai

271 comments

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lionkor|1 year ago

> The company’s mission is to understand the true nature of the universe.

I yawned so hard my jaw unlocked.

Can't wait to see groundbreaking... checks notes... "advancements in various applications, optimizations, and extensions of the model".

Do these companies only hire yes men?

antman|1 year ago

Seems like the Nigerian Prince bayesian model as analysed by Microsoft. Due to many false positives within the thousands of potential responders pool, they emit a signal that only a real easy victim would fall for to reduce the costs of their final filtering process.

https://www.microsoft.com/en-us/research/wp-content/uploads/...

gizajob|1 year ago

“The company’s mission is to understand the true nature of the universe” - There’s no way an LLM is going to get anywhere near understanding this. The true nature of the universe is unlikely to be captured in language.

benterix|1 year ago

These people always exist. They pick up whatever is en vogue and sell it to investors. What happens later is of secondary importance, what matters is that money changed hands.

b3lvedere|1 year ago

It kinda reminds me of James Bond Diamonds are Forever where the main scientist is convinced Blofeld is doing the right thing until the very bitter end.

Intralexical|1 year ago

Hopefully incompetence can save us from the megalomania.

mgh2|1 year ago

The technology's applications are so broad that its exploratory nature in the mission is expected

ETH_start|1 year ago

This is a peculiar company mission so not sure why you find it odd to make the official one of xAI.

The all-encompassing nature of it seems befitting a company producing increasingly general-purpose AI.

melodyogonna|1 year ago

Everybody wants Elon Musk to make them some money.

naveen99|1 year ago

To play devil’s advocate, he lists “truthful” as a goal, which is emphatically missing from openai, google, microsoft, facebook. Google even removed don’t be evil. Elon is greedy and truthful (although obviously with plenty of self deceipt when conflict of interest…). But how far can you really go with truth, when no one wants the truth: not the west, not the east, and not the Middle East. And your allies and investors are in it for the greed part, but not the truth part so much. Trump tried the same thing with truth social… problem is all the greed and shadiness loses credibility with truth also.

leobg|1 year ago

My take is that Elon’s basically saying:

We don’t give a s%#* about people wanting to use AI to write SEO spam, automate their customer support or generate content to keep the kids quiet. We want to use this tech as a tool to solve real world problems in a way that, looking back 500 years from now, people will see this as a time of innovation, rather than a time of decline.

Wether he’ll succeed is a different question, of course. But such a direction is clearly missing in the other players. They are just too eager to cater to the laziest segment of the economy of bits. They’re about changing pixels on other people’s screen.

klunger|1 year ago

> xAI will continue on this steep trajectory of progress over the coming months, with multiple exciting technology updates and products soon to be announced.

There is a lot of potential for using AI in drug discovery and development, biotech more broadly and chemistry/material science. Pharma is investing heavily in this right now. If useful, the output here could potentially also support Neuralink and even SpaceX.

Coupled with the line about the "true nature of the universe", I guessed this was really about entering that space.

But when you look at the careers page [https://x.ai/careers#open-roles], they are only hiring AI engineers. No biochemists or MDs, material scientists or any other natural science domains. So, if natural science discovery is actually on the road map, either: - it is in the long term future - they have no idea what they are doing

More likely, they are not going for natural science and this is basically just a play to compete with openAI. And, in that case, I don't understand how they convinced investors to put 6 billion dollars into it.

dagmx|1 year ago

The “true nature of the universe” bit is that Elon believes that competing LLMs are too neutered because they disallow certain terms etc. (his words are much more politically charged and I do not agree with his take on this and many other things)

Therefore he believes that Grok can be an LLM trained on the voices of the people using his alleged free speech platform:X.

croes|1 year ago

Because OpenAI is the poster child and that kind of AI is already shoved in all kinds of products by Microsoft.

AIs like AlphaFold are hardly in the news compared to OpenAI and its competitors.

bglazer|1 year ago

The thing about “figuring out the true nature of the universe” is that you *have to do experiments*. It’s non-negotiable. There’s no amount of really hard thinking or parameters or GPU’s that will let you know the secrets of the universe. It’s astonishing to me that both the AI-maximalists and the AI-doomers are both seemingly unaware of this basic, fundamental fact of science.

ml-anon|1 year ago

Szegedy and some others were working on science-related (math and natural science) projects at Google prior to leaving. This is probably just piggy backing on their prior work without any commitment going forward.

Of course they're not going to make any fundamental contributions to natural science or mathematics (or likely even LLM training/understanding).

keyle|1 year ago

What could have they possibly shown to the investors to get that kind of cash thrown at them? Asking for a friend...

Did x.ai just become worth more than x.com? We must be nearing the bubble popping...

breck|1 year ago

> What could have they possibly shown to the investors to get that kind of cash thrown at them?

Their founder has a track record of making his investors a lot of money while solving really hard, important problems.

Current valuations:

- Tesla $570B

- SpaceX $180B

- Neuralink $5B

- Boring $5.6B

dubeye|1 year ago

Maybe they showed them the founders ROI record?

MrSkelter|1 year ago

Nothing. That’s just the money he needs to buy compute and staff in today’s market. He’s boasting about 100k GPUs. That’s 60k per unit including staff, power, racks, repair, upgrades, failures, development etc. It doesn’t even cover costs.

dgellow|1 year ago

The Elon Musk Bubble, I really hope so. That’s so much capital and attention that could be spent on actual research instead of over-hyped and over-promised gimmicks

stockboss|1 year ago

Elon Musk

netsharc|1 year ago

I wonder if the investors are just like crypto-bros and pyramid-schemers. Knowing it's bullshit, but hoping the next dumbass will come tomorrow, next week, etc, to buy it off them where they can make a profit...

Considering the price of e.g. BTC, maybe thinking "People with money can't be this dumb!" is the dumbass move...

aredox|1 year ago

6 billion dollars less for really innovative ventures. 6 billion dollars less for us hackers.

And certainly 6 billion dollars down the drain, funneled to stave the collapse of X/Twitter and Musk paying his dues.

Aeolun|1 year ago

How is it that some people get 6B to understand the true nature of the universe? It’s not like they have a track record of doing anything other than absolutely devastating a previously successful company…

If I ask someone to give me 6B to understand the true nature of the universe they’d laugh in my face, but I sort of assume I’d have an even chance of doing better.

tim333|1 year ago

>It’s not like they have a track record of doing anything other than absolutely devastating a previously successful company…

He's also transformed two industries and become a dominant player in each. Just do that and the investors will give you money.

makingstuffs|1 year ago

Yeah, surely a better group of people to understand the universe would be, I don’t know, a team of Astro physicists whom didn’t buy a social media company so they could push their unfiltered opinions onto the masses. Just a hunch.

whamlastxmas|1 year ago

Agreed, Elon has failed at everything he’s attempted and is basically broke these days, along with his companies teetering on the edge of bankruptcy. People need to stop giving him money because all he does is lose it

chambo622|1 year ago

What is the bull case here? They close the gap to Anthropic and become a 4th place player?

darth_avocado|1 year ago

The bull case is… they will have FSD by the end of the year… 2017…

tim333|1 year ago

I guess like OpenAI but without Altman taking it over.

blackeyeblitzar|1 year ago

Unique data set. And Elon. And with Elon, comes a great set of talent. From https://x.ai/about

> Our team is led by Elon Musk, CEO of Tesla and SpaceX. Collectively our team contributed some of the most widely used methods in the field, in particular the Adam optimizer, Batch Normalization, Layer Normalization, and the discovery of adversarial examples. We further introduced innovative techniques and analyses such as Transformer-XL, Autoformalization, the Memorizing Transformer, Batch Size Scaling, μTransfer, and SimCLR. We have worked on and led the development of some of the largest breakthroughs in the field including AlphaStar, AlphaCode, Inception, Minerva, GPT-3.5, and GPT-4.

They are already competitive despite the late start: https://x.ai/blog/grok-1.5v

aaron695|1 year ago

> What is the bull case here?

The real bull case - Elon doesn't kowtow to mentally ill basement nerds and the media/politicians trying to not lose power.

Can you image someone running in to tell Elon the fat nerds on HN are in a tizzy about Grok telling people to eat rocks?

Other bull case he's obviously silo-ing Twitter for unique training data. Reddit can only ask nicely you don't train off them.

Twitter with a good AI could become quite strong. I'm not as bullish on this, but... Twitter is all the cutting edge news. ChatGPT was happy to be years out of date.

No one cares Russia has finally manned up and launched a tactical nuke 24 hours after it happens, something new will be trending. This is Twitters strength, to the minute data. One of the AI's will have to specialize in this.

bboygravity|1 year ago

Why 4th place? Got a crystal ball of substantiation or is this another case of ordinary Elon bashing?

yumraj|1 year ago

These investors seems to haven’t learnt a lesson after the Twitter/X eff-up.

NVIDIA must be happy, $5.9B will go to it.

retrac98|1 year ago

I wish he’d just focus on SpaceX or Tesla (the cars, not the robot).

BrainInAJar|1 year ago

It's probably better for both companies that he isn't. Better for him to torch a $6b series B and Twitter than mess up spacex & tesla more than he already has

MP_1729|1 year ago

“You want to know how to paint a perfect painting? It's easy. Make yourself perfect and then just paint naturally.” - Robert M. Pirsig

The Musk reasoning here is stupid, but smart. If he makes a superhuman intelligence, he can only ask it "What is dark matter?" and it might figure out.

I have some big problems with this idea, but it isn't 100% stupid. Just 98% stupid.

croes|1 year ago

So we push billions of dollars into text and picture generators which contribute to more carbon dioxide emissions like MS already showed.

At least we will go down with enough spam texts and cat pictures.

dagmx|1 year ago

Are there any notable people associated with this other than Elon?

I’m curious what they’re bringing to the table to be able to fetch that valuation.

nomilk|1 year ago

Something surprising Sam Altman mentioned on the Lex Fridman podcast was that it only takes about 6 months to get a top physicist up to speed and productive researching AI.

So the team could largely be newbies to AI (with extremely good fundamental knowledge/skill), rather than folks we've all heard of from the AI scene.

YetAnotherNick|1 year ago

It's literally the first sentence in the link

> Our Series B funding round of $6 billion with participation from key investors including Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal and Kingdom Holding, amongst others.

ergocoder|1 year ago

Did they raise 6B or at 6B valuation?

danpalmer|1 year ago

I would bet money that this is not $6bn in cash that has been raised. It sounds like it is the raise at a $24bn valuation, but I'd bet this is less cash and more varied assets or financial instruments.

Whether it's calling Teslas cheap when accounting for your time spent filling up, taking on significant debt rather than selling company shares as Tesla/SpaceX, or leveraging his personal shares for debt, Musk is always pulling some trick to reach numbers like this. That's not to say these sorts of things aren't common among the ultra-rich, but I get the impression Musk does it at every opportunity.

All this to say that I don't think $6bn in cash changed hands for this, I'd expect there's credit lines secured on Musk's own valuation of the company, possibly service credits from compute providers (this can even be via VCs), or other clever tricks to inflate it.

aimazon|1 year ago

considering the names involved and why the money is needed, almost certainly $6bn raised

qeternity|1 year ago

Quite a few comments here in disbelief and hating on Musk.

For all the criticism of Elon, he has been foundational in Paypal, Tesla and SpaceX and OpenAI. Even if you think Tesla is troubled/overvalued, he has built multiple enormous companies, and one of a handful of people to have built a company into a $1T valuation (however fleeting).

So yes, the arithmetic for VCs is very straightforward: for better or for worse, Elon Musk is able to execute in the only way that matters to investors.

halfmatthalfcat|1 year ago

Foundational at Paypal and OpenAI? I've heard different. Also leaving out Twitter which has at least halved (if not more) it's valuation. I would say he's batting less than .500, so while still good, not a sure thing in the slightest and the trajectory seems to be on the down.

Brajeshwar|1 year ago

First (from the title before reading), I thought - wow, I think I should retry using x.ai (Amy) for my Calendar. How much did they sold the domain for?

dustincoates|1 year ago

The former x.ai (scheduling) sold to an events company a few years ago and shut down. I imagine the domain was pricy, but not as much as for a company actively using it.

shreezus|1 year ago

Nvidia just added $6B in revenue.

We’re witnessing an arms race for compute, as compute will likely be the primary constraint for building AGI.

3abiton|1 year ago

> as compute will likely be the primary constraint for building AGI.

Zuck argues it's energy, and I seem to line up behind him.

rchaud|1 year ago

And Qatar and Deutsche Bank can breathe a sigh of relief, knowing that their next few quarterly interest payments will be coming through after all.

Aeolun|1 year ago

You’d think that at some point someone realizes it’s more profitable to sell shovels…

naveen99|1 year ago

Arms races tend to bankrupt everyone except the winner. good luck to all participants.

light_triad|1 year ago

> We partner closely with X Corp to bring our technology to more than 500 million users of the X app.

Investors paid about $12 per X user/bot.

Interesting they are opting for a spinoff rather than doing this in house. Perhaps to capitalise on the hype and attract researchers who don't want the baggage of being associated with polarising brands?

lars_francke|1 year ago

X.ai used to be a service similar to calendly. I still mourn its shutdown and, seeing this, had hoped that it is resurrected :(

ravetcofx|1 year ago

I've been using the free version of cal.com which has been phenomenal, and there's self hostable option which is nice

hydroreadsstuff|1 year ago

Did they raise 6B or are they valued at 6B and don't disclose the raised amount? Probably the latter?

rullopat|1 year ago

He is the richest man in the world and he doesn’t have 6B in the pocket to finance it on his own?

Bilal_io|1 year ago

A rich man doesn't get rich by risking their own money. They risk the money of their investors

sidcool|1 year ago

Seeking investment is a sensible way to raise money and be more accountable IMO. And if investors are ready, why would anyone risk their own money? It's plain business sense.

JumpCrisscross|1 year ago

> he doesn’t have 6B in the pocket to finance it on his own?

This isn’t how you gain allies.

NewJazz|1 year ago

He has to hold as many shares of Tesla right now to make sure he can ram through the compensation package.

rvz|1 year ago

I don't think you know how this works. The rich don't risk with their own money, only the money from others.

Even if they do, it is much less of their wealth on the line managed by others to grow it.

naveen99|1 year ago

The ones doing it on their own, are probably doing it privately. One of the reasons for us government asking to know, so atleast they are not kept in the dark.

stockboss|1 year ago

why do wealthy people get mortgages to buy their homes when they can just pay full cash?

nomilk|1 year ago

Asset rich doesn't imply cash rich.

bagels|1 year ago

Why risk your own money, when you can risk the money of others, and reap the rewards?

naveen99|1 year ago

$6B seems like not enough ? Google, meta have spent far more, and have less to show for it than openai (which has also spent more).

mvkel|1 year ago

> The company’s mission is to understand the true nature of the universe.

I would think full-throated development of a diffusion model would make a lot more sense to achieve the mission, since its chief mechanism is separating signal from noise.

Considering we're the only beings in the known universe that have language, I'm not sure there are many universal insights to be gleaned from an LLM

sidcool|1 year ago

That's a huge round.

wiradikusuma|1 year ago

So.. tech winter over?

rullopat|1 year ago

Just rename your company adding .AI and it will be immediately summer

1vuio0pswjnm7|1 year ago

"xAI is primarily focused on the development of advanced AI systems that are truthful, competent, and maximally beneficial for all of humanity. The company's mission is to understand the true nature of the universe."

As if we are currently living in some _false_ representation of the universe.

As it happens "AI" is proving to be a challenge to the meaning of the word "true".

This makes "the 'true' nature of universe" a particularly amusing usage.

abdussamit|1 year ago

This is insanity ... 6B!

ganzuul|1 year ago

Twice the annual budget of the Red Cross.

ulfw|1 year ago

What is wrong with investors to give Elon Musk more money for his me-too products? Why would they waste $6,000,000,000?

floppiplopp|1 year ago

Anything Musk is now too many inferior products and broken promises for any sensible investor. Might as well just burn the money.

chambo622|1 year ago

Yet the money keeps coming, so I want to learn what I'm missing.

andsoitis|1 year ago

> Anything Musk is now too many inferior products

Tesla: "Tesla maintains an 87% brand retention rate, with Lexus (68%) and Toyota (54%) trailing, according to a new Bloomberg Intelligence survey. Moreover, 81% of prospective US Tesla drivers are new customers switching from competing EV brands." -- https://electrek.co/2024/04/09/87-percent-us-tesla-drivers-s...

I think you would be hard pressed to find any serious thinker exclaiming that SpaceX and Starling are inferior products.

rapsey|1 year ago

SpaceX and/or Starlink going public has everyone on their knees begging for a peace of the action.

rchaud|1 year ago

> Might as well just burn the money.

That's the A16Z bat-signal.

andrewstuart|1 year ago

Do venture capitalists usually back companies with part time founder/CEOs?

bagels|1 year ago

No. But they will certainly back ones that have built multiple 100B companies.

rchaud|1 year ago

It's not unheard of. Sequoia funded a company where the CEO split his time between his crypto exchange and a hedge fund.

rvz|1 year ago

Like how I have questioned so much ridiculous unjustified valuations in the AI space, with the likes of Perplexity, Stability, Inflection, etc which these AI labs are not making enough money to support themselves.

How is xAI worth $24BN? I bet the reason is because Elon Musk.

But until I see a significant jump in xAI making at least $100M+ a quarter, I don't think that is enough to justify that valuation to even be any where near close to Anthropic.

In fact, this means Anthropic should be worth much more and the majority of other AI companies / labs (excluding OpenAI, Midjourney, Cerebras and Groq) to be worth much less.

To downvoters:

To date as of 2024, Anthropic's valuation is around $15BN - $18BN.

So you are telling me that xAI's valuation is justified and should be worth more than Anthropic?

Care to elaborate and discuss? (Especially if you're an insider.)

[0] https://www.nytimes.com/2024/03/27/technology/amazon-anthrop...

ml-anon|1 year ago

Even OpenAI is burning money. There is no way that xAI is worth more than Twitter.

Inflection basically collapsed: the founders and best of the technical team jumped ship to MS. They were massively overvalued and basically produced nothing.

Perplexity and Stability are running on pure social-media grift. Neither will be around long once their entire business model is eaten by the big players at economies of scale they will never manage.

Anthropic is a weird middle ground. They seem to be doing novel and impactful research as well as shipping big performant models. But its still unclear how they end up really making money and justifying their valuation.

stealthcat|1 year ago

Unitree is better than Optimus.

Qwen et al is better than Grok.

BYD is better than Tesla.

nomilk|1 year ago

> Comma.ai is better than Tesla FSD

I don't know about the other comparisons mentioned, but Hotz himself said comma is/has always been about 2 years behind Tesla.

blackeyeblitzar|1 year ago

> BYD is better than Tesla cars

Are you aware of the recent issues with BYD and other Chinese EV brands? Entire dealerships have gone up in flames from dangerous vehicles. Not lone incidents but tens of dealerships at least, in just this month.

Tesla cars may have flaws but there is no way a BYD can be compared to them even on the basics. And Tesla’s software is simply way better and makes it clear that it was designed by a competent tech company not an old car company. Other brands aren’t on that level yet.