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Musk's AI Startup xAI Raises Close to $6bn, Valued at $18bn
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Kristoffer Lindström
May 24, 2024
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TECH BRIEF
Alphabet is shifting its research lab, "X", towards a new direction, spinning off numerous projects into independent startups. The move signifies Alphabet's transition from unrestrained invention to more tightly focused commercialization. One such project - a mechanical exoskeleton designed to enhance human mobility - was developed by Kathryn Zealand. After leaving "X", Zealand established an independent startup maintaining the project's initial focus. This scenario is becoming increasingly common as Alphabet strives to monetize key innovations and maximize sustainable value creation.
In its quest for accelerated growth, Canva Inc. has showcased a fresh suite of design tools aimed at enterprise audiences, directly challenging rival Adobe Inc’s eminent customer base. Offering dynamic features intended for team cohesion in HR, sales, and design, the platform is designed for seamless graphic manipulation and style alignment. By extending its reach beyond individual consumers and toward enterprise, Canva hopes to leverage the AI trend and its recent $26 billion funding. The company has also seen growth through the acquisition of Affinity's creative software earlier this year.
OpenAI has rescinded its nondisparagement agreement that put employee vested equity at risk, a policy causing distress among staff. CEO Sam Altman was reportedly unaware of this clause and pledged to amend the company's paperwork. However, it is unclear whether employees who lost their equity will have it reinstated. This comes amidst other contentious issues at OpenAI, including the disbanding of their AI safety team and accusations of unauthorized voice usage by actress Scarlett Johansson.
OpenAI has partnered with News Corp., granting its ChatGPT access to news content from renowned sites. The deal may be valued over $250 million and is part of OpenAI's plan to improve models by entering content licensing contracts with media organizations. Reflecting the impact of AI on journalism, concerns rise that people might depend on AI chatbots like ChatGPT, affecting the traditional role of journalists.
Nvidia, the leading AI chip manufacturer, recently reduced the price of its advanced AI chip H20 in China due to plentiful supply and lessening demand. This is in contrast to a higher-priced rival chip from Huawei, highlighting the intense competition Nvidia is encountering in China due to US sanctions and rising rivalry. This situation is prompting concerns for Nvidia, whose China business contributed 17% of its total revenue in Fiscal 2024.
TikTok has unveiled TikTok Symphony, a suite of AI tools designed to streamline ad creation for businesses. This includes an AI video-generator for automated ad production, an AI Assistant, and predictive AI for performance solutions. The firm also launched TikTok One, a centralized marketing hub. This comes as 61% of TikTok users have reportedly made purchases following ad engagement on the platform.
Elon Musk's AI startup xAI has garnered fresh support from major venture capitals including Lightspeed, Andreessen Horowitz, Sequoia Capital, and Tribe Capital, driving its valuation close to $18bn. Musk seeks nearly $6bn in this funding round to outpace industry leaders like OpenAI, Anthropic, and Google. This funding will contribute to a post-money valuation of $24bn and the progression of xAI's Grok chatbot.
Microsoft's outage impeding Bing, Copilot, DuckDuckGo, and ChatGPT operations is partly resolved, according to the tech giant. Bing and Copilot are back for some users, while the incidence of DownDetector reports for Bing and DuckDuckGo has decreased. The contributing factors to the outage remain unclear.
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