What’s the point of Elon Musk’s AI company?

What’s the point of Elon Musk’s AI company?

Tesla Inc CEO Elon Musk

Look, I’ve been following the adventures of xAI, Elon Musk’s AI company, and I’ve come to a conclusion: its only real idea is “What if AI, but with Elon Musk this time?”

What’s publicly available about xAI makes it seem like Musk showed up to the generative AI party late, and without any beer. This is 2024. The party is crowded now. xAI doesn’t seem to have anything that would let it stand out beyond, well, Musk.

That hasn’t stopped Musk from shopping his idea to investors, though! Last December, xAI said it was trying to raise $1 billion in a filing with the Securities and Exchange Commission. (This is not the same company as the X that was formerly known as Twitter.) There is also reporting from the Financial Times saying Musk is looking for up to $6 billion in funding.

To be sure, Musk has tweeted that “xAI is not raising capital and I have had no conversations with anyone in this regard.” Musk says a lot of things in public and only some of them are true, so I’m going to rock with the filing, which I have seen with my own eyes.

xAI (not Twitter) is sort of an odd entity. Besides its entanglement with X (Twitter), it doesn’t really seem to have a defined purpose. The xAI pitch deck obtained by Bloomberg relies on two things:

  • OpenAI had a very successful 2023. Musk was, of course, a founder of OpenAI and stormed off in a huff in 2018. Lately, he’s been saying OpenAI offered him shares and he turned them down.
  • An investment in xAI gives you access to the “Muskonomy.” Nota bene: That word is not my fault. It’s true Musk is involved in a lot of companies and is the putative CEO of several of them. Besides xAI (not Twitter) and X (Twitter), there’s Neuralink, SpaceX, the Boring Company, and Tesla. We will get to Tesla in a minute.

xAI (not Twitter) so far has one product, a supposedly sassy LLM called Grok, which users can access by paying $16 a month to X (the Twitter company) and then going through the X (Twitter) interface. xAI (not Twitter) does not have a standalone interface for Grok. My colleague Emilia David has characterized it as having “no reason to exist,” because it isn’t meaningfully better than free chatbot offerings from its competitors. Its clearest distinguishing feature is that it uses X (Twitter) data as real-time input, letting it serve as kind of opera glasses for platform drama. The Discover / Trends section of the X (Twitter) app is being internally reworked to feature Grok’s summaries of the news, according to a person familiar with the development.

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