AI Competition Heats Up as xAI Closes Biggest Series B of All Time
00:00Today on the AI Daily Brief, XAI has raised $6 billion at a huge valuation.The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI.To join the conversation, follow the Discord link in our show notes.Welcome back to the AI Daily Brief Headlines Edition, all the AI headlines you need in around five minutes.Today, because of some travel, I will not be doing the normal main episode, so this is actually going to be a quite extended headlines edition.there's been a lot to catch up on over the holiday weekend.We kick it off with a follow-up of a story that we were tracking when it was just rumor,which is, of course, Elon Musk's AI company behind the Grock Chatbot,
00:44has officially completed this series B round, and the details were largely what we knew.It was a $6 billion round at a post-money valuation of $24 billion.You might remember that at the very last minute,the round jumped in size from around $3 billion to $6 billion,given how much demand there was.If you're interested in the dynamics of that round,I did a whole episode about how, if you are investing in the frontier model space,there are really such a small number of competitors that you can realistically make a bet on
01:10that you're sort of priced into paying whatever the market is going to pay.So who did participate in this?There are a lot of folks that you would expect.Andresen Horowitz, Sequoia Capital, Fidelity was also an investor, as were the Saudis,with Prince Al-Aweeb bin Talal and Kingdom Holdings.Of course, the big question is, did we get any interesting news in this announcement?Did they say anything about what's coming?The short answer is not really.
01:31They write, XAI has made significant strides over the past year, from the announcement of the company in July 2023 to the release of GROC 1 on X in November to the recent announcements of the improved GROC 1.5 model model with long context capability to GROC 1.XAI's model capabilities have improved rapidly.With the open source release of GROC1, XAI has opened doors for advancement in various applications, optimizations, and extensions of the model.XAI will continue this steep trajectory of progress over the coming months, with multiple exciting technology updates and products soon to be announced.The funds from the round will be used to take XAI's first products to market, build advancedinfrastructure, and accelerate the research and development of future technologies.So anyways, TLDR, no, we did not get anything new.However, that note about the funding being used to build out the infrastructure does havesome interesting context.
02:18The information reports, Musk plans XAI supercomputer dubbed Gigafactory of compute.Right to Nisigar-Dizzy, Elon Musk has said publicly that his artificial intelligence startupXAI will need a whopping 100,000 specialized semiconductors to train and runthe next version of its conversational AI Grock. To make the chatbot smarter, he's recentlytold investors, XAI plans to string all these chips into a single massive computer, what he'scalling a gigafactory of compute. So this was clearly a big part of this pitch. The informationcontinues, in a May presentation to investors, Musk says he wants to get the supercomputer running bythe fall of 2025. Musk claims that when completed, this would be at least four times the size
02:54of the biggest GPU clusters that exist today. It's clear that this infrastructure buildout is a keypart of Elon's approach to catching up to rivals. At the same time, Microsoft and OpenAI have alsodiscussed a $100 billion supercomputer that would be several times larger than this and contain millions ofNvidia GPUs. Another interesting tidbit from the article, quote, XAI could partner with Oracle on thesupercomputer. It has been talking to Oracle executives about potentially spending $10 billion to rent cloudservers over a period of years. XAI already rent servers with about 16,000 H-100 chips from the company,making it Oracle's largest customer in that area. In terms of sooner updates, Muskhas said that XAI is currently training GROC 2.0 on 20,000 GPUs, and this vision appears to push into
03:34multi-modality. Importantly, all of this is separate from Dojo, which is a Tesla supercomputer, which is basedon a chip that they built in-house, and is focused on running the AI that works with self-drivingcapabilities. In addition to their in-house chips, Elon has also said that Tesla has access to35,000 Nvidia H-100s to train itself driving AI and plans to double that by the end of 2024.Amira Frotty at the information writes about how this all fits into a largertrendline. He says, you're going to hear the term supercomputer a lot in the coming months.It's just a cool way of saying a large cluster of servers running Nvidia chips, but without asmany words. Anyone who's anyone in AI is going to be talking about their supercomputer, and we
04:11imagine that Elon Musk will be one of them. Amir continues, what strikes us is that his plan to geta cluster of 100,000 of Nvidia's H-100 chips by the end of next year, will probably put hima full year behind OpenAI in Microsoft. You may or may not consider that to be a long timein AI land, but knowing how competitive Musk is, we won't be surprised if the Musk'sLuster ends up being even bigger than planned. Amir continues, though, one wildcard is NVIDIA's CEOJensen Huang, and whether he wants to give Musk a head start or special allocation of NVIDIA'snext flagship chip, Blackwell, at the expense of other firms. There is a precedent for this.NVIDIA, a year ago, aided smaller cloud providers with allocations of its H-100 chips,
04:46so they could better compete with bigger rivals like Amazon and Microsoft. In short, let thesupercomputer race begin. So what was the chatter here? Well, a lot of it was just about the size.Andrew Gao points out that the $6 billion Series B is significantly larger than the previous biggestseries B, in fact, doubling it.Others pointed out that Elon's key competitive advantage continues to be the relationship with Twitter.Robert Scoble writes,People tried to get me to leave Twitter after Elon bought it, saying he would screw up everything here,but I stayed because I knew Elon had a vision for the Everything app that would be compelling.
05:17Investors like the pitch.Congrats, Elon.OpenAI just showed the world the Everything app.But I can't get it to tell me about the smoke in the sky.XAI has the necessary foundation to make a very compelling everything app.That's already a high bar because Open AIs is quite compelling already.Part of Elon's big promise is, of course, that Grok won't censor answers in the same waythat the other big labs do.
05:36Speaking of the other big labs, a little bit of controversy, as Chief AI scientist at META,Yan Lacoon, couldn't resist taking to Twitter to rib Elon.In response to a post where Elon Musk wrote,Join XAI if you believe in our mission of understanding the universe, which requiresmaximally rigorous pursuit of truth without regard to popularity or political.correctness. Jan Lecun responded,Join X-A-I if you can stand a bosswho claims that what you are working on will be solved
05:59next year, no pressure. Claims that what you areworking on will kill everyone and must be stopped or paused.Yay, vacation for six months.Claims to want a maximally rigorous pursuit of truthbut spews crazy ass-assieson his own social platform.When someone responded, not a good look,maybe explain what you have against Dilan.
06:15Jan writes, I like his cars, his rockets,his solar panels, and his satellite network.I very much dislike his vengeful politics,his conspiracy theories, and his hype.Elon Musk eventually would respond, basically accusing him of being a proxy for Zuckerberg.Elon tweeted, Yon is, quote, just following orders.Now, it may be just the fact that this poll was taken on Twitter,but when Bojan formerly of Invidia asked which AI lab people would most like to work at,
06:39XAI absolutely crushed.With more than 91,000 votes, XAI was at 51.4% compared to OpenAI's 31.2%.Compared to Google DeepMines, 10.8%, compared to meta-aI's 6.6% down near the bottom.Elon responded, but he added a snapshot before he did, and when there were about 4,500 votesbefore Elon got there, the results were XAI at 40%, open AI at 29%, meta at 17, and Google DeepMind at 14.So XAI was still leading.Again, we are on Twitter slash X, so there's going to be some bias here, but still it'spretty dramatic relative to what I might have expected.
07:14Hello, friends, before we get back to the episode, I want to tell you about something specialI'm doing on Super Intelligent this June.Super is, of course, our platform for AI learning, and I've heard from a lot of you that you really want something for a true AI beginner, someone who's really just getting their feet wet with these tools.So what I'm going to do is put together basically a course that sits on top of and uses super intelligent tutorials and lessons, but where I hand guide you through around 10 different lessons and how-toes that I think once you complete them will have you ahead of 80% of the other people who are just starting to use AI right now.If you are interested in this learning experience, go to B-Supert.aI and sign up using code June.You'll get 25% off your first month, and I'll automatically add you to that AI for beginners group.That's B-super.a.I discount code June. See you there.Speaking of OpenAI, in the wake of all of its super alignment researchers leaving, and that team being disbanded,
08:06the company has announced that they've created a new committee to oversee safety and security.OpenAI says the committee would comprise several of its board members and employees, including CEO Sam Altman.It would evaluate and further develop the company's processes and safeguards over the next 90 days.Now, the part of the post that the New York Times picked up was captured in the headline,OpenAI says it has begun training a new flagship AI model.Cade Metz writes,OpenAI said on Tuesday that it has begun training a new flagship artificial intelligence model that would succeed GPT4.The startup said in a blog post that it expects the new model to bring the next level of capabilities
08:36as its drives to build AGI.Regarding the new Safety and Security Committee, OpenAI wrote,While we are proud to build and release models that are industry leading on both capabilities and safety,we welcome a robust debate at this important moment.A couple things that I think are interesting about this.First of all, there's no universe in which OpenAI hasn't been training post-GPT-4 modelsfor a very long time.I think the presumption, as the New York Times is making it, that this is just starting
08:59now and that it could be nine to 12 months before they come out is totally absurd and a misreadingof the whole situation.There's simply no way that this hasn't been ongoing.I mean, I remember a year ago when I was discussing this and asked people what they thoughtand there was a ton of conviction that training was already happening just without discussion.The second part, though, which is even more interesting,has to do with a conversation that we had starting over last weekend,prompted by Tyler Cowan's op-ed in Bloomberg,
09:22that the AI safety movement had died.Now, his point, hold aside the hyperbolic headline,was that there had been a major shift,and for whatever reason, people just weren't paying as much attention to AI safetyas they had been, call it, six months ago.It feels to me a little bit like OpenAI is testing the watersaround really what public sentiment here is.Part of the reason that they might be giving themselves these 90 days
09:42to figure out what the right approach to AI safety is,is to actually gauge public sentiment during that time.Basically, are they going to design this entirely based on what they actually thinkversus what do they have to do to appease external pressure?Certainly those concerned with AI safety haven't just crawled into some hole.The economists, for example, ran an op-ed by Helen Toner and Tasha McCauley,who are two former Open AI board members,with Helen especially being at the center of the whole Sam-firing Rehiring saga,
10:08and the op-ed is called AI firms mustn't govern themselves.Can private companies pushing forward the frontier of a revolutionary new technology be expectedto operate in the interest of both their shareholders in the wider world?When we were recruited to the Board of OpenAI, we were cautiously optimistic that the company'sinnovative approach to self-governance could offer a blueprint for responsible AI development.But based on our experience, we believe that self-governance cannot reliably withstand the pressureof profit incentives.With AI's enormous potential for both positive and negative impact, it's not sufficient
10:34to assume that such incentives will always be aligned with the public good.For the rise of AI to benefit everyone, governments must begin building effective regulatoryframeworks now. In my opinion, we have about a seven or eight month period now where these debatesare going to be had without any real stakes. What I mean by that is that I don't think that thestakes are going to present themselves until after the U.S. elections, and specifically until the newCongress is sworn in. I think the reality is that as much as other nations hold safety summits andthings like that, it will be the U.S. regulatory regime that will have the biggest impact in howthese questions play out, in what the relationship between the private sector and industry actually is.
11:09and I just don't see that happening before the elections are done.In the meantime, the competition between the big tech companies continues.As we get closer and closer to Apple's WWDC, the rumor mill is in full swing,with one of the most listened to sources being Bloomberg's Mark German.His latest on this is called Apple Betts that its giant user base will help it win in AI.And the TLDR on this is don't expect some big, crazy, impressive thing.The header sentence of this piece,though Apple's first set of modern AI features won't be as impressive as rival offerings,
11:38the company is betting that its massive customer base can give it an edge. At Apple's developerconference next month, the company will unveil a different approach to artificial intelligence,focusing on tools that ordinary consumers can use in their daily lives. The idea is to appealto a user's practical side and leave some of the more whiz-bang features to the other companies.Apple, German, points out, is in a challenging position. It needs to convince consumers and investorsthat it's doing exciting things in AI. But the company is following major AI announcements fromMicrosoft, Google, and OpenAI, which have stolen the spotlight. According to German, AI will bethe key focus of the WWDC, but it seems like it's going to be a lot AI integration into existing
12:13core apps. German writes, there are several new capabilities in the works for this year, includingones that transcribe voice memos, retouched photos with AI, and make searches faster and more reliablein the spotlight feature. The Siri personal assistant will get an upgrade as well, with morenatural sounding interactions based on Apple's own LLMs, and there's also a more advanced Siri comingto the Apple Watch. One standout feature writes, German, will bring generative AI to emojis. The company isdeveloping software that can create custom emojis on the fly based on what users are texting.That means you'll suddenly have an all new emoji for any occasion.German points out, however, that this is all purely catch-up, his words.
12:45There's no leapfrogging here.There's also no Apple design chatbot.German also says that a partnership between OpenAI and Apple will be a component of theWWDC announcement.This all strikes me as really difficult, frankly.On the one hand, it is absolutely the case that most people are going to have their firstinteractions with AI in the context of applications they already know and use,on devices that they already have, and in that way, I wouldn't count Apple out. At the same time,
13:10the seismic gap between what it appears they'll announce and what other companies are already doingseems very likely to me to make Apple feel extremely far behind when it comes to consumer popularsentiment. And that's to say nothing of Wall Street, which I can't imagine being particularlyexcited about this. If I'm right, the question will become whether the fact that Apple hasall those installs already, and people they can push AI too, will beat out.the fact that they're still running behind, or on the other hand, do the folks who are early adoptersjust need something more exciting? Luckily, we don't have to wait very much longer for that,and so we'll finally be able to talk about what is actually here rather than just future rumors.
13:49A couple more before we get out of here, GROC, not Elon's GROC, but the GROQ GROC is apparentlyoutraising $300 million. You might remember GROC is the extremely fast inference chip that hasreally impressed people with their demos which you can find online. The information rightsstarted nearly eight years ago by Jonathan Ross, one of the inventors of Google's specialized chipcalled the Tensor Processing Unit, Grock has positioned itself as a cheaper and faster alternativeto Nvidia chips. GROC designs chips for AI inference, as opposed to chips that help companieslike OpenAI train new models. The information writes,Even with more money, Grock will face an uphill battle as it aims to get developers to switch
14:23off Nvidia's chips and the accompanying software they're familiar with, known as Kuda.Much larger companies, including Amazon, Google, and Microsoft have been trying for several yearsto develop an AI server chip to wean their cloud customers off in Vidias, but they've madelimited progress. Over in Google land, a company is once again scrambling to manually remove all thoseweird answers that were coming up in search, things like putting glue on pizza and suggesting that userseat rocks. And as the Verge writes, it's an odd situation since Google has been testingAI overviews for a year now. And CEO Sundar Pichai has said the company served over a billionqueries in that time. But Pichai has also said that Google has brought the cost of delivering
14:57AI answers down by 80% over that same time, driven by hardware, engineering, andand technical breakthroughs. It appears that kind of optimization might have happened too earlybefore the tech was ready. Said one AI founder who wished to remain anonymous, a company once knownfor being at the cutting edge and shipping high-quality stuff is now known for low-quality output that'sgetting memed. So as always, tons going on in the world of AI. I'm sure we will have more to discuss laterthis week, but for now, that is going to do it for the AI Daily Brief. Appreciate you listeningor watching as always, and until next time, peace.
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