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  • Writer's pictureDavid Manion

Elon Musk’s X.AI Wants to Take on Microsoft-Backed OpenAI – Who Will Win?

Elon Musk has once again set his sights on the artificial intelligence industry after his unsuccessful involvement with OpenAI, the company behind the popular AI chatbot ChatGPT.

The new company, called X.AI, is dedicated to developing AI technologies and has been incorporated in Nevada, according to a state filing obtained by The Verge.

X.AI currently has Musk as its director and Jared Birchall, the director of Musk’s family office, is listed as its secretary.

The filing also shows that X.AI has authorized the sale of 100 million shares for the privately held company.

Although there is not yet any public information about what X.AI will do, rumors about the billionaire’s plans to create an AI firm to compete with the Microsoft-backed OpenAI have been circulating for some time now.

Just recently, a report from Business Insider revealed that Musk had purchased thousands of graphic processing units (GPUs) to power an upcoming generative AI product.

Furthermore, the tech tycoon has reportedly sought funding from Tesla and SpaceX investors to get the company off the ground.

Notably, X.AI’s branding matches that of X Corp., which Musk has assigned to Twitter, and his vision of an “everything app.”

The company’s name is part of Musk’s ongoing association with the letter X, as seen in his former online banking startup, which later became PayPal, and one of his children whom he refers to as X.

The incorporation of the company in Nevada indicates Musk may be searching for more flexible legal protections for his AI firm.

Legal experts suggest that Nevada law provides more discretion and protection for a company’s management and officers than the law in Delaware, which is home to many US-based corporations.

Musk is Recruiting AI Researchers to Compete with OpenAI

Over the past months, Musk has been recruiting researchers to help create a rival effort to OpenAI, the AI research company that he co-founded eight years ago.

The billionaire has so far recruited Igor Babuschkin, a scientist at DeepMind, an AI lab owned by Alphabet Inc.

However, his attempts to recruit other AI researchers from OpenAI have had limited success.

OpenAI made headlines after the splashy debut of its ChatGPT chatbot in November last year, which set off a fever pitch of investor interest in the AI sector.

The company made waves once again after releasing GPT-4, an AI model designed to mimic human reading and writing that was able to outperform most people on standardized exams like the Law School Admission Test (LSAT).

Musk left OpenAI in early 2018 after losing a power struggle to its current chief executive, Sam Altman, driven largely by the company’s pivot to a for-profit model.

Musk Signs Letter Calling for Pause in Powerful AI Development

Musk has recently joined a forces with a number of other tech gurus to sign an open letter that called for a six-month pause in developing systems more powerful than GPT-4, citing potential risks to society.

The billionaire is not alone in his concern regarding the potential dangers of AI tools. In fact, some countries have already taken harsh measures to ban AI tools.

For one, Italy has become the first country in the West to ban ChatGPT. The country’s Data Protection Authority has also launched an investigation into the AI chatbot due to a suspected breach of data-collection rules and its failure to verify whether its users are older than 13.

Ulrich Kelber, the German commissioner for data protection, has also said that Germany may also follow Italy’s lead and ban ChatGPT due to worries about the security of personal information.

More recently, China’s payment & clearing industry association warned against uploading confidential documents to OpenAI’s ChatGPT and other AI tools, citing risks such as “cross-border data leaks.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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