xAI is among the newest artificial intelligence (AI) startups. However, it has already risen to second place in terms of valuation, just behind OpenAI. Elon Musk obviously does not intend to stop there; the billionaire aims to surpass his great rival, even if it means deploying colossal resources to achieve this.
Spectacular growth
Because one thing seems obvious, Musk has not digested the meteoric rise of the ChatGPT editor. In reality, he maintains very tense relations with the management of OpenAI, which he co-founded in 2015, then left three years later. Since then, the entrepreneur has been very critical of the startup, particularly in view of the involvement of Microsoft, which supported it to the tune of several billion dollars.
This case is playing out today in court, with the CEO of SpaceX and Tesla having filed complaints several times against the management of OpenAI. But he also intends to confront him directly on the field. From the beginning of 2023, the businessman assured that he wanted to develop an artificial intelligence called “ TruthGPT ”, which would allow us to understand “ the deep nature of the universe “. At the same time, he castigated the conversational agents of Google and others, considered too “ woke “.
It is precisely with this in mind that he founded xAI in the summer of 2023, alongside artificial intelligence leaders such as Igor Babuschkin, veteran of Google’s DeepMind research laboratory and OpenAI. A year and a half later, the young company has raised a total of $12 billion, bringing its valuation to $50 billion. In the field of AI startups, only OpenAI does better with its $157 billion valuation.
Elon Musk is banking on his other companies to power xAI
The entrepreneur did not skimp on the means to obtain such results. Grok was launched only a few weeks after the founding of xAI. The model, based on a character from a science fiction work, stands out from the competition thanks to its offbeat sense of humor and sarcasm.
When it was released, however, its performance was lower compared to that of other major models, but Elon Musk relied on one of its strengths to compensate for its limitations: its other companies. For example, xAI entered into an agreement with Tesla to access a share of its revenue in exchange for access to its technology and resources.
But it is above all the role of X, formerly Twitter, which has proven crucial in the deployment of AI. Initially, Musk decided to make it only accessible to paying subscribers of the platform. It recently moved up a gear by allowing all users of the social network to chat with Grok. Enough to increase its number of users by millions. Since this week, AI also has its own dedicated application in certain countries.
The model also has access to all the data posted on X, in real time. This gives it a serious advantage over the competition, believes the businessman.
That’s not all. According to the Wall Street JournalxAI powers customer support functions for SpaceX’s Starlink Internet service. It should also contribute to the creation of new AI functions for the X search engine.
The Colossus feat
The race for AI is being played out on another front, that of chips. And Elon Musk understood that well. From 2023, he asked Nvidia, the undisputed leader in AI accelerators, to reallocate 12,000 GPUs reserved for Tesla to X and xAI. A demand so abrupt that it directly affected the chipmaker’s supply chain.
Musk also used his knowledge by approaching Oracle, led by his friend Larry Ellison, with the aim of accessing some of the company’s GPUs. He even put pressure on the latter to release even more. But these different maneuvers did not satisfy him.
In the spring of 2024, the entrepreneur turned his sights to Memphis, Tennessee, where he decided to transform an abandoned factory in the city into a data center specifically dedicated to his startup’s AI. The work was carried out in record time, despite the fears of some locals regarding the pollution caused by the installation.
Colossus was inaugurated in September, only a few months after construction began. It is quite simply the most powerful supercomputer in the world. Equipped with 100,000 Nvidia H100 processors when it opened, it has since been gradually supplemented by 100,000 additional H100s, in addition to 50,000 H200s, the manufacturer’s even more advanced AI processors.
For the moment, Grok remains behind its major rivals from a commercial point of view, but Elon Musk’s objective is clear, clear and precise: to design the most powerful AI in the world, ” from all points of view “. And his decisive role in the Trump administration could give him an advantage in carrying out this project.
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