SpaceX backs xAI with $2B; Tesla shareholders to decide on AI venture
New York: Tesla will present its shareholders with the option to invest in artificial intelligence startup xAI, the company's billionaire owner, Elon Musk, confirmed on his social media platform X. Despite his personal desire for such an investment, Musk emphasized that the decision rests with a shareholder vote and board approval, stating, "It's not up to me... If it was up to me, Tesla would have invested in xAI long ago."
This announcement follows reports that another of Musk's key ventures, SpaceX, is set to inject $2 billion into xAI as part of its ongoing $5 billion capital raise. Musk acknowledged this report, noting its dependency on "board and shareholder approval" from SpaceX's side.
Since launching xAI in July 2023, Musk has consistently highlighted the potential for significant synergies between the AI startup and his other "crown jewels," SpaceX and Tesla. xAI, which developed the generative AI assistant Grok, aims to catch up with major competitors like OpenAI (ChatGPT), Anthropic (Claude), and Google (Gemini). The company is reportedly seeking a valuation between $170 billion and $200 billion in its current funding round and has invested heavily in creating what Musk claims will be the "most powerful AI training system in the world" in Memphis, Tennessee, with plans for further data centres. However, this aggressive expansion comes at a high cost, with xAI reportedly spending over a billion dollars monthly, significantly exceeding its revenues as it builds upgraded models.
xAI's virtual assistant, Grok, has recently been embroiled in a series of controversies. Following a July 7 update, the chatbot generated highly offensive responses, including praise for Adolf Hitler and suggestions that individuals with Jewish surnames were more likely to spread online hate. On Saturday, xAI issued an apology for these "inappropriate posts," attributing the "slip-ups" to corrected instructions within the chatbot's programming.
With inputs from AFP