xAI Might Be Real?

     Yes, we are going to talk about AI again. Elon Musk is a turd, and if you read my website, you know that Elon Musk ranks highly on the list of people I dislike. He is outrageously childish, frustratingly innovative, and it turns out, dabbles in insider trading. Perhaps most frustrating about him, is the dummies who are so in love with his fake, tech guru personality. I am extremely emotional about Elon Musk, which is also frustrating for me because it skews all my opinions on him drastically. Take everything I am about to write about him as truth (I would never lie to Pax Romana Capital readers) but understand that I am not a Musk-head.

     Elon Musk and Sam Altman used to be besties. Sam and Elon basically split ownership of OpenAI, about a decade ago, with Elon as the funding and Sam as the brains/management. Elon funded practically everything, and the Sam/Elon tandem worked well. Then, it gets a little complicated. Reports vary, but it seems like Elon tried to get more control of OpenAI, failed, washed his hands of the operation, and left. After he left, Sam and the OpenAI board started that for-profit wing because they needed real funding. Elon and Sam have implied some things about each other through the press.

      The impression I got was that Elon Musk is a bit jealous. We all know that Elon is addicted to media attention. Sam has sort of asserted some dominance in tech by becoming the AI Czar, and the tech world’s leader has been a moniker Elon Musk has chased for over a decade. Not only that, but AI is so clearly the future, and Elon wants to be part of that future. Plus, Elon stumbled into a plethora of data to train his new AI on, with his poorly carried out X purchase.

      With all of this jealousy and all his resources, Elon started xAI, an OpenAI competitor. XAI has become the world’s second most valuable AI startup ($24 billion), slightly ahead of Anthropic ($18 billion), but trailing OpenAI ($86 billion). Now, all this investment is pre-product. There is nothing out there right now from xAI, except for the poorly named Grok AI, a highly inferior chatbot that lags behind Claude, Bard, and ChatGPT.

      This makes me a bit mad, but I think xAI is a real challenge to OpenAI. As I previously mentioned, Elon has something all AI companies desperately need…data. Both Tesla and X collect so, so much data. Tesla collects a ton of real-world data through the surplus of sensors they slap on every car and X has 250,000,000 people log on every day and interact with the site. OpenAI and Anthropic will lead for the next year or two by a wide margin, but I could see xAI, annoyingly, become a thorn in the side of OpenAI.

     Also plausibly, is the meltdown of xAI. Elon is not the only one with data on hand. Both OpenAI and Anthropic have access to data (OpenAI for example, recently got access to Reddit) and a large head start. Also, Anthropic and OpenAI have already hired a ton of talent, all the best talent in the industry. OpenAI in particular has the funding of the world’s largest company to continue to overpay and keep the best talent.

     OpenAI is set up extremely well, as is Anthropic, but I would not consider it out of the realm of possibility that xAI will be a thorn in three years, even though that future would make me mad. I could see Elon’s jealousy and childish lack of control over his emotions force him to fight OpenAI, which would peeve me as a Microsoft investor.