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Startup xAI Raises $6 Billion

Startup xAI, which operates in the artificial intelligence industry, raised $6 billion in investment funds.

Startup xAI Raises $6 Billion

The mentioned company, which is at an early stage of existence, was founded by Elon Musk. According to media reports, the billionaire intends to use the received investments to strengthen the startup’s position as a competitive player in the artificial intelligence industry, capable of challenging his former OpenAI allies. Recently, there have been significant disagreements between the ChatGPT developer and Elon Musk. It is worth noting that the billionaire is one of the founders of OpenAI. At some point, he left the company board, justifying his decision by the potential risk of conflict of interest associated with the fact that Tesla has begun to develop artificial intelligence for self-driving cars.

This year, Elon Musk sued OpenAI, accusing the firm of violating the founding agreement. The billionaire’s main claim is that the company is currently focused on achieving maximum performance in the context of commercial goals and practically does not pay attention to the initial aspiration, which provides for the design of general-purpose artificial intelligence that benefits all mankind.

The Series B funding round, which was announced on xAI’s blog last Sunday, May 26, took place less than a year after the startup’s debut. Also, this round is one of the largest investments in the area of development of artificial intelligence tools, which is currently under formation.

It’s worth noting, that Elon Musk is one of those who can be called a proponent of artificial intelligence. At the first AI Safety Summit, which was held in the United Kingdom last year, the billionaire said that this advanced technology, when used in a responsible approach, will be able to transform the life process of human civilization in a positive sense. Also, in his opinion, artificial intelligence can become a kind of platform for the era of abundance. At the same time, he insists on the need for extreme caution in the AI development process, noting that advanced technology contains potential dangers. Last year, the billionaire was one of the leaders of the artificial intelligence industry, who called for suspending the process of machine intelligence evolution due to the likelihood of significant threats associated with an increase in the capacity and expansion of the abilities of virtual thinking systems.

In November, Mr. Musk launched the Grok chat platform, which was integrated into the functional space of the social network X, known as Twitter until the summer of 2023. As part of the official positioning, this digital product has been described as a competitor to ChatGPT. So far, Grok is the most visible and significant result of xAI’s activities. Elon Musk stated that this chat platform was trained, having access to information in real-time. Over time, the startup announced Grok 1.5 with improved operation capabilities with long context and images.

Currently, Elon Musk’s startup includes specialists who previously were part of the teams of such well-known brands in the technology sector as DeepMind, Microsoft, and Tesla. Nowadays, also a company recruiting engineers and researchers in London, San Francisco, and Palo Alto.

It is known that xAI intends to spend raised investment funds on bringing its products to market. The startup will also use part of the funds to accelerate the development of future technologies and build advanced infrastructure. The relevant information is contained in a message posted on the company’s blog.

The startup’s pre-money valuation has reached the $18 billion mark. This information is contained in a message posted on Elon Musk’s account on the social network X.

Marquee venture funds, including Sequoia Capital and Andreessen Horowitz, joined the funding round, during which the startup managed to raise $ 6 billion. Saudi Prince Alwaleed Bin Talal also took part in the investment. The result of this process turned out to be one of the largest in the artificial intelligence industry as of today.

It is worth noting that it is currently common practice for tech giants to invest in startups specializing in AI development. The appropriate approach is rational and, in a certain sense, pragmatic. Large companies, through methods of financial interaction with smaller firms developing promising products, gain access to advanced technologies with the possibility of their deep integration into their digital ecosystems. Microsoft invested about $13 billion in OpenAI. In the above-mentioned lawsuit, Elon Musk negatively characterized this collaboration, saying that too close cooperation between the technology giant and the ChatGPT developer has negative consequences. According to him, OpenAI has actually become a subsidiary of Microsoft. The billionaire also said that the technology giant is having an impact on the value system of the ChatGPT developer.

Amazon has invested about $4 billion in Anthropic, which has designed a chatbot called Claude. It is also worth noting that such a practice of interaction between business giants and startups helps to stimulate a large-scale process of dissemination and implementation of artificial intelligence in various spheres of activity. Against the background of this tendency, the issue of cybersecurity is becoming more and more urgent. Fraudsters operating in the virtual space use the fact of the availability of artificial intelligence technologies for their own purposes. Applying AI makes their criminal methodology more sophisticated and complex in terms of detection capabilities. In these circumstances, user awareness is of particular importance. For example, a query in an Internet search system, such as how to know if my camera is hacked, will allow everyone to get information about signs of unauthorized access to the device.

Artificial intelligence has also created new tools for generating information. Cybercriminals often use AI for deepfakes. In this case, it means audio recordings and videos in which the speech and behavior of a certain person are imitated with maximum accuracy. Such scenarios of using artificial intelligence are aimed either at stealing funds and blackmail or at manipulation within the framework of public discourse. It is worth noting that tools to counter these methods of cybercrime are already being developed. For example, in October, the Reality Defender startup raised $15 million to improve models that detect content generated using artificial intelligence.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.