Elon Musk’s artificial intelligence company xAI is raising up to $6 billion at a $50 billion valuation, according to CNBC.
TakeAway Points:
- Elon Musk’s artificial intelligence startup, xAI, is funding up to $6 billion at a $50 billion value.
- $5 billion from Middle Eastern sovereign funds and $1 billion from other investors make up the funding, which is anticipated to close early next week, according to sources.
- Bluesky has gained over 1.25 million new users in the past week, indicating some social media users are changing their habits following the U.S. presidential election.
- The startup’s influx of users underscores how the app has been able to pitch itself as an alternative to rivals X, which is owned by Elon Musk, and Meta’s Threads.
- Bluesky claims 15.2 million total users, a fraction of the user bases of X and Threads.
xAI to buy 100,000 Nvidia chips
Sources told Faber that the funding, which should close early next week, is a combination of $5 billion expected from sovereign funds in the Middle East and $1 billion from other investors, some of whom may want to re-up their investments.
The money will be used to acquire 100,000 Nvidia chips, per sources familiar with the situation. Tesla’s Full Self Driving is expected to rely on the new Memphis supercomputer.
Musk’s AI startup, which he announced in July 2023, seeks to “understand the true nature of the universe,” according to its website. Last November, xAI released a chatbot called Grok, which the company said was modeled after “The Hitchhiker’s Guide to the Galaxy.” The chatbot debuted with two months of training and had real-time knowledge of the internet, the company claimed at the time.
With Grok, xAI aims to directly compete with companies including ChatGPT creator OpenAI, which Musk helped start before a conflict with co-founder Sam Altman led him to depart the project in 2018. It will also be vying with Google’s Bard technology and Anthropic’s Claude chatbot.
Now that Donald Trump is president-elect, Musk is beginning to actively work with the new administration on its approach to AI and tech more broadly, as part of Trump’s inner circle in recent weeks.
Trump plans to repeal President Joe Biden’s executive order on AI, according to his campaign platform, stating that it “hinders AI innovation and imposes Radical Leftwing ideas on the development of this technology” and that “in its place, Republicans support AI development rooted in free speech and human flourishing.”
X rival Bluesky gains 1.25 million users following U.S. election
Microblogging startup Bluesky has gained over 1.25 million new users in the past week, indicating some social media users are changing their habits following the U.S. presidential election.
Bluesky’s influx of users shows that the app has been able to pitch itself as an alternative to X, formerly Twitter, which is owned by Elon Musk, as well as Meta’s Threads. The bulk of the new users are coming from the U.S., Canada and the United Kingdom, the company said Wednesday.
“We’re excited to welcome everyone looking for a better social media experience,” Bluesky CEO Jay Graber said in a statement.
Despite the surge of users, Bluesky’s total base remains a fraction of its rivals.′ The Seattle startup claims 15.2 million total users. Meta CEO Mark Zuckerberg said in October Threads had nearly 275 million monthly users. Musk in May claimed that X had 600 million monthly users, but market intelligence firm Sensor Tower pegged X’s monthly base at 318 million users in October.
Created in 2019 as a project inside Twitter, when Jack Dorsey was still CEO, Bluesky doesn’t show ads and has yet to develop a business model. It became an independent company in 2021. Dorsey said in May of this year that he’s no longer a member of Bluesky’s board.
“Journalists, politicians, and news junkies have also been talking up Bluesky as a better X alternative than Threads,” wrote Similarweb, the internet traffic and monitoring service, in a Tuesday blog.
Some users with new Bluesky accounts posted that they had moved to the service due to Musk and his support for President-elect Donald Trump.
“It’s appalling that Elon Musk has transformed Twitter into a Trump propaganda machine, rife with disinformation and misinformation,” one user posted on Bluesky.
This is Bluesky’s second notable surge in the last couple of months.
Bluesky said it picked up 2 million new users in September after the Brazilian Supreme Court suspended X in the country for failing to comply with regional content moderation policies and not appointing a local representative.
