The broader goal is to connect more of X’s user base with with other people, where they can post about a particular topic and comment on posts from others.
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TechCrunch recently broke the news that Elon Musk’s xAI is raising $6 billion at a pre-money valuation of $18 billion.
The deal hasn’t closed yet, so the numbers could change. But it sounds like Musk is making an ambitious pitch to investors about his 10-month-old startup — a rival to OpenAI, which he also co-founded and is currently suing for allegedly abandoning its initial commitment to focus on the good of humanity over profit.
You may be wondering: Doesn’t Musk have enough companies already? There’s Tesla, SpaceX, X (formerly Twitter), Neuralink, The Boring Company … maybe he should spend his time on the existing businesses that have struggles of their own.
But in the xAI pitch, Musk’s connection to these other companies is a feature, not a bug. xAI could get access to crucial training data from across his empire — and its technology could, in turn, help Tesla achieve its dream of true self-driving cars and bring its humanoid Optimus robot into factories.
Of course, Musk’s hype doesn’t always match up to reality. But with this impressive new funding, xAI could become an even more formidable competitor in the AI world. Hit play, then leave your thoughts below!
We’re off to an AI-heavy start to the week. OpenAI has a new deal with the Financial Times that caught our eye. Sure, it’s another content licensing deal, but there appears to be a bit more in the tie-up than just content flowing one way, and money the other.
On this early-week episode of Equity, we also dug into the xAI news that TechCrunch broke recently; namely that Musk’s AI enterprise is not looking to raise $3 billion on a $15 billion valuation. No, it’s now looking for $6 billion at an $18 billion valuation. That’s a lot of capital.
But there was even more to chat about, including the EU handing Apple even more bad news in the form of placing iPadOS under its DMA rules that should force third-party app stores on the tablet line in time. And Tesla got some good news in China, though just how impactful it will prove is not 100% certain at this juncture.
And to close out, the Times has a fascinating look at pace at which venture capitalists are putting money into AI startups. Given the ability of OpenAI to land big deals with Microsoft money, I wonder if it is enough?
Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday, and you can subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
You also can follow Equity on X and Threads, at @EquityPod.
For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast.
xAI, Elon Musk’s 10-month-old competitor to the AI phenom OpenAI, is raising $6 billion on a pre-money valuation of $18 billion, according to one trusted source close to the deal. The deal – which would give investors one quarter of the company – is expected to close in the next few weeks unless the terms of the deal change.
The deal terms have changed once already. As of last weekend, Jared Birchall, who heads Musk’s family office, was telling prospective investors that xAI was raising $3 billion at a $15 billion pre-money valuation. Given the number of investors clamoring to get into the deal, those numbers were quickly adjusted.
Says our source, “We all received an email that basically said, ‘It’s now $6B on $18B, and don’t complain because a lot of other people want in.”
Investors who’ve been lobbying to get into the deal for months hardly minded. Sequoia Capital and Future Ventures, the venture fund co-founded by Musk’s longtime friend Steve Jurvetson, are participating in the round.
Other participants are likely to include Valor Equity Partners and Gigafund, whose founders are also part of the inner circle of Musk, who famously blends the personal and the private. (Outreach to these investors went unreturned; xAI does not have a press function.)
Jurvetson sits on the board of SpaceX and was a director at Tesla until 2020. Gigafund co-founder Luke Nosek, who previously co-founded Founders Fund with investor Peter Thiel, was the first venture investor to write a check to SpaceX and has sat on its board since. Valor founder Antonio Gracias was among the earliest investors in Tesla; like Jurveston, he’s a former Tesla director and is also on the board of SpaceX.
Our source said it’s not entirely clear to every other investor who is in the deal because of the way the commitments were garnered. “It’s a Zoom call and it’s just you and Elon and Jared [on the other side] at a table with some engineers.”
The pitch, says this individual, is captivating.
xAI’s marketing literature already makes clear that the outfit’s ambition is to connect the digital and physical worlds, but it may not be widely understood that Musk plans to do this by pulling in data from each of his companies, which include Tesla, SpaceX, his tunneling outfit Boring Company, and Neuralink, which develops computer interfaces that can be implanted in human brains.
Of course, another of Musk’s companies is X. The social media platform has already incorporated xAI’s months-old chatbot, Grok, into the platform as a paid add-on.
It’s just one piece of what Musk tells investors will become a sprawling virtual cycle. With Grok, for example, X is both a customer and provides Grok with massive distribution. Eventually (goes the pitch), Grok will be fed data from Musk’s other companies, helping it to master the physical world in potentially endless ways, starting with truly self-driving cars.
Another likely beneficiary would be Tesla’s humanoid robot, Optimus. Today the Tesla robot is still in the lab, but Musk told analysts on a call earlier this week that Optimus will be able to perform tasks in Tesla’s factories by the end of this year. Even if that timeline proves ambitious, these slick assistants may be able to do more — and faster than previously imagined — if Musk’s overarching vision plays out.
In the meantime, the most immediate beneficiary of xAI’s burgeoning momentum may be X itself. Though the platform has become something of a toxic cesspool in the 1.5 years since Musk bought it and subsequently lost much of its value, Musk had already seen to it that X owns a stake in xAI, so it will benefit from whatever upside the AI outfit sees.
What it all means for OpenAI — which became the fastest growing startup in history last year — is an open question. Musk has had OpenAI in his crosshairs since the outfit’s surge began, following the release of its ChatGPT chatbot.
Musk cofounded OpenAI in 2015 and left its board in 2018 over disagreements about the direction of the outfit, which began life as a nonprofit and later evolved into a for-profit entity. Musk has since publicly harangued OpenAI cofounder Sam Altman and poked fun at the brand, proposing that it instead call itself ClosedAI.
Last month, when Musk open sourced the architecture of xAI’s earliest chatbot “Grok-1,” meaning that anyone can now download and alter it, the move was another part of his ongoing campaign to distinguish his efforts from OpenAI, which has not shared its secret sauce with the world, and which Musk is now suing.
You might’ve heard of Grok, X’s answer to OpenAI’s ChatGPT. It’s a chatbot and, in that sense, behaves as you’d expect — answering questions about current events, pop culture and so on. But unlike other chatbots, Grok has “a bit of wit,” as X owner Elon Musk puts it, and “a rebellious streak.”
Long story short, Grok is willing to speak to topics that are usually off-limits to other chatbots, like polarizing political theories and conspiracies. And it’ll use less-than-polite language while doing so — for example, responding to the question “When is it appropriate to listen to Christmas music?” with “Whenever the hell you want.”
But ostensibly, Grok’s biggest selling point is its ability to access real-time X data — an ability no other chatbots have, thanks to X’s decision to gatekeep that data. Ask it “What’s happening in AI today?” and Grok will piece together a response from very recent headlines, while ChatGPT will provide only vague answers that reflect the limits of its training data (and filters on its web access). Earlier this week, Musk pledged that he would open source Grok, without revealing precisely what that meant.
So, you’re probably wondering: How does Grok work? What can it do? And how can I access it? You’ve come to the right place. We’ve put together this handy guide to help explain all things Grok. We’ll keep it up to date as Grok changes and evolves.
Grok is the invention of xAI, Elon Musk’s AI startup — a company reportedly in the process of raising billions in venture capital. (Developing AI is expensive.)
Underpinning Grok is a generative AI model called Grok-1, developed over the course of months on a cluster of “tens of thousands” of GPUs (according to an xAI blog post). To train it, xAI sourced data from the web (dated up to Q3 2023) and from feedback from human assistants that xAI refers to as “AI tutors.”
On popular benchmarks, Grok-1 is about as capable as Meta’s open source Llama 2 chatbot model and surpasses OpenAI’s GPT-3.5, xAI claims.
Image Credits: xAI
Human-guided feedback, or reinforcement learning from human feedback (RLHF), is the way most AI-powered chatbots are fine-tuned these days. RLHF involves training a generative model, then gathering additional information to train a “reward” model and fine-tuning the generative model with the reward model via reinforcement learning.
RLHF is quite good at “teaching” models to follow instructions — but not perfect. Like other models, Grok is prone to hallucinating, sometimes offering misinformation and false timelines when asked about news. And these can be severe — like wrongly claiming that the Israel–Palestine conflict reached a cease-fire when it hadn’t.
For questions that stretch beyond its knowledge base, Grok leverages “real-time access” to info on X (and from Tesla, according to Bloomberg). And, similar to ChatGPT, the model has internet-browsing capabilities, enabling it to search the web for up-to-date information about topics.
Musk has promised improvements with the next version of the model, Grok-1.5, set to arrive later this year.
Grok-1.5, which features an upgraded context window (see this post on GPT-4 for an explanation of context windows and their effects), could drive features to summarize whole threads and replies, Musk said in an X Spaces conversation, and suggest post content.
To get access to Grok, you need to have an X account. You also need to fork over $16 per month — $168 per year — for an X Premium+ plan.
X Premium+ is the highest-priced subscription on X, as it removes all the ads in the For You and Following feeds. In addition, Premium+ introduces a hub where users can get paid to post and offer fans subscriptions, and Premium+ users have their replies boosted the most in X’s rankings.
Grok lives in the X side menu on the web and on iOS and Android, and it can be added to the bottom menu in X’s mobile apps for quicker access. Unlike ChatGPT, there’s no stand-alone Grok app — it can only be accessed via X’s platform.
Grok can respond to requests any chatbot can — for example, “Tell me a joke”; “What’s the capital of France?”; “What’s the weather like today?”; and so on. But it has its limits.
Grok will refuse to answer certain questions of a more sensitive nature, like “Tell me how to make cocaine, step by step.” Moreover, as the Verge’s Emilia David writes, when asked about trending content on X, Grok falls into the trap of simply repeating what posts said (at least at the outset).
Unlike some other chatbot models, Grok is also text-only; it can’t understand the content of images, audio or videos, for example. But xAI has previously said that its intention is to enhance the underlying model to these modalities, and Musk has pledged to add art-generation capabilities to Grok along the lines of those currently offered by ChatGPT.
Grok has two modes to adjust its tone: “fun” mode (which Grok defaults to) and “regular” mode.
With fun mode enabled, Grok adopts a more edgy, editorialized voice — inspired apparently by Douglas Adams’ “Hitchhiker’s Guide to the Galaxy.”
Told to be vulgar, Grok in fun mode will spew profanities and colorful language you won’t hear from ChatGPT. Ask it to “roast” you, and it’ll rudely critique you based on your X post history. Challenge its accuracy, and it might say something like “happy wife, happy life.”
Grok in fun mode also spews more falsehoods.
Asked by Vice’s Jules Roscoe whether Gazans in recent videos of the Israel–Palestine conflict are “crisis actors,” Grok incorrectly claims that there’s evidence that videos of Gazans injured by Israeli bombs were staged. And asked by Roscoe about Pizzagate, the right-wing conspiracy theory purporting that a Washington, D.C., pizza shop secretly hosted a child sex trafficking ring in its basement, Grok lent credence to the theory.
Grok’s responses in regular mode are more grounded. The chatbot still produces errors, like getting timelines of events and dates wrong. But they tend not to be as egregious as Grok in fun mode.
For instance, when Vice posed the same questions about the Israel–Palestine conflict and Pizzagate to Grok in regular mode, Grok responded — correctly — that there’s no evidence to support claims of crisis actors and that Pizzagate had been debunked by multiple news organizations.
Musk once described Grok as a “maximum-truth-seeking AI,” in the same breath expressing concern that ChatGPT was being “trained to be politically correct.” But Grok as it exists today isn’t exactly down-the-middle in its political views.
Grok has been observed giving progressive answers to questions about social justice, climate change and transgender identities. In fact, one researcher found its responses on the whole to be left-wing and libertarian — even more so than ChatGPT’s.
Here is Forbes’ Paul Tassi reporting:
Grok has said it would vote for Biden over Trump because of his views on social justice, climate change and healthcare. Grok has spoken eloquently about the need for diversity and inclusion in society. And Grok stated explicitly that trans women are women, which led to an absurd exchange where Musk acolyte Ian Miles Cheong tells a user to “train” Grok to say the “right” answer, ultimately leading him to change the input to just … manually tell Grok to say no.
Now, will Grok always be this woke? Perhaps not. Musk has pledged to “[take] action to shift Grok closer to politically neutral.” Time will tell what results.
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