Elon Musk's xAI Valued at $24 Bln after Fresh Funding 

Elon Musk, chief executive officer of SpaceX and Tesla, speaks to the media during the launch of SpaceX's Starlink internet service in Indonesia at a sub district community health center in Denpasar, Bali, May 19, 2024. (Reuters)
Elon Musk, chief executive officer of SpaceX and Tesla, speaks to the media during the launch of SpaceX's Starlink internet service in Indonesia at a sub district community health center in Denpasar, Bali, May 19, 2024. (Reuters)
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Elon Musk's xAI Valued at $24 Bln after Fresh Funding 

Elon Musk, chief executive officer of SpaceX and Tesla, speaks to the media during the launch of SpaceX's Starlink internet service in Indonesia at a sub district community health center in Denpasar, Bali, May 19, 2024. (Reuters)
Elon Musk, chief executive officer of SpaceX and Tesla, speaks to the media during the launch of SpaceX's Starlink internet service in Indonesia at a sub district community health center in Denpasar, Bali, May 19, 2024. (Reuters)

Elon Musk's AI startup xAI raised $6 billion in series B funding, reaching a post-money valuation of $24 billion as investors bet big on challengers to companies like OpenAI in the intensifying AI race.

The funding round was backed by investors including Andreessen Horowitz and Sequoia Capital, the company said in a blog post on Sunday.

The company's pre-money valuation was $18 billion, Musk said in a post on X.

The money will be used to take xAI's first products to market, build advanced infrastructure and accelerate research and development of future technologies, xAI said.

"There will be more to announce in the coming weeks," Musk said in another X post, in response to the announcement of the funding.

Companies like Microsoft backed OpenAI and Alphabet's are among those leading the fierce race for generative AI dominance, driving significant investments and innovation in the rapidly evolving landscape.



AI Chatbots Must Learn to Say 'Help!' Says Microsoft Exec

A Microsoft logo is seen in Los Angeles, California US November 7, 2017. (Reuters)
A Microsoft logo is seen in Los Angeles, California US November 7, 2017. (Reuters)
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AI Chatbots Must Learn to Say 'Help!' Says Microsoft Exec

A Microsoft logo is seen in Los Angeles, California US November 7, 2017. (Reuters)
A Microsoft logo is seen in Los Angeles, California US November 7, 2017. (Reuters)

Generative AI tools will save companies lots of time and money, promises Vik Singh, a Microsoft vice president, even if the models must learn to admit when they just don't know what to do.
"Just to be really frank, the thing that's really missing today is that a model doesn't raise its hands and say 'Hey, I'm not sure, I need help,'" Singh told AFP in an interview.
Since last year, Microsoft, Google and their competitors have been rapidly deploying generative AI applications like ChatGPT, which produce all kinds of content on demand and give users the illusion of omniscience.
But despite progress, they still "hallucinate," or invent answers.
This is an important problem for the Copilot executive to solve: Singh's corporate customers can't afford for their AI systems to go off the rails, even occasionally.
Marc Benioff, CEO of Salesforce, this week said he saw many of his customers increasingly frustrated with the meanderings of Microsoft's Copilot.
Singh insisted that "really smart people" were trying to find ways for a chatbot to admit "when it doesn't know the right answer and to ask for help."
'Real savings'
A more humble model would be no less useful, in Singh's opinion. Even if the model has to turn to a human in 50 percent of cases, that still saves "tons of money."
At one Microsoft client, "every time a new request comes in, they spend $8 to have a customer service rep answer it, so there are real savings to be had, and it's also a better experience for the customer because they get a faster response."
Singh arrived at Microsoft in January and this summer took over as head of the teams developing "Copilot," Microsoft's AI assistant that specializes in sales, accounting and online services.
These applications have the gargantuan task of bringing in revenue and justifying the massive investments in generative AI.
At the height of the AI frenzy, start-ups driving the technology were promising systems so advanced that they would "uplift humanity," in the words of Sam Altman, head of OpenAI, which is mainly funded by Microsoft.
But for the time being, the new technology is mainly used to boost productivity, and hopefully profits.
According to Microsoft, Copilot can do research for salespeople, freeing up time to call customers. Lumen, a telecom company, "saves around $50 million a year" doing this, said Singh.
Singh's teams are working on integrating Copilot directly into the tech giant's software and making it more autonomous.
"Let's say I'm a sales rep and I have a customer call," suggested the executive. Two weeks later, the model can "nudge the rep to go follow up, or better, just go and automatically send the email on the rep's behalf because it's been approved to do so."
'First inning'
In other words, before finding a solution to global warming, AI is expected to rid humanity of boring, repetitive chores.
"We're in the first inning," Singh said. "A lot of these things are productivity based, but they obviously have huge benefits."
Will all these productivity gains translate into job losses?
Leaders of large firms, such as K Krithivasan, boss of Indian IT giant TCS, have declared that generative AI will all but wipe out call centers.
But Singh, like many Silicon Valley executives, is counting on technology to make humans more creative and even create new jobs.
He pointed to his experience at Yahoo in 2008, when a dozen editors chose the articles for the home page.
"We came up with the idea of using AI to optimize this process, and some people asked 'Oh my God, what's going to happen to the employees?'" said Singh.
The automated system made it possible to renew content more quickly, thereby increasing the number of clicks on links but also the need for new articles.
"In the end," said the executive, "we had to recruit more editors."