Musk's next darling

 

It’s done.

$6 billion in the bank.

And it’s going to take every dollar…

This last Sunday was a big day in the race towards artificial general intelligence (AGI). 

Elon Musk’s latest new venture, xAI, announced the closing of its $6 billion series B funding round at a post money valuation of $24 billion.

It’s a massive raise for a company that has been around for less than a year. And it comes with an even more remarkable valuation. 

It’s the kind of valuation that is only possible because of Musk’s demonstrable track record of building teams capable of pulling off things that have never been done before.

This raise won’t be a surprise to regular Outer Limits subscribers. I’ve written about xAI a few times, most recently in a couple of past AMAs. Now that the round has closed, the money is in, and the race to AGI has become even more interesting.

A Lot Done With a Little

Prior to the raise, xAI had been doing a lot with limited resources. 

Since its launch in July of 2023, it released Grok-1, its large language model (LLM) in November of last year. It subsequently open-sourced that same release, to critics’ surprise.

And by March 2024, xAI released Grok-1.5, which added advanced reasoning and problem solving to Grok.

It’s performance is impressive, and not far off in terms of benchmarks compared to major foundational LLMs like Gemini Pro 1.5 (Google), GPT-4 (OpenAI), and Claude 3 Opus (Anthropic).

Source: xAI

The reason that it’s impressive is that to date, xAI was funded by Musk with $750 million of seed capital, and about $250 million of in-kind investment from X (Twitter) in compute resources.

That’s “only” about $1 billion in total, and xAI is already a player in the race to AGI.

And that’s what the additional $6 billion is for.

It takes billions of investment to purchase enough computational power to build advanced large language models and train an artificial general intelligence. And it takes money and reputation to pull in the very best talent to make it happen.

And fortunately, Musk and his company now have both.

J Brown