Latest / Elon Musk Podcast / xAI Hits $200B Valuation After $10B Raise

Transcript

xAI Hits $200B Valuation After $10B Raise · Elon Musk Podcast

• 0:01
  Hey everybody, welcome back to the Elon Musk Podcast.
• 0:05
  This is a show where we discuss. The Critical.
• 0:07
  Crossroads the shape SpaceX Tesla X.
• 0:11
  The Boring Company. And Neurolink, I'm your host,
• 0:14
  Will Walden. XAI just locked in $10 billion
• 0:19
  in new funding. At a $200 billion valuation,
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  it's double where it stood four months ago.
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  The speed of that jump raises one pretty big question.
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  What exactly are investors paying for right now?
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  Elon Musk has now secured the second largest private valuation
• 0:37
  and AI behind Open AI. This new route, which includes
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  participation from Valor Equity Partners, VI Capital, Anderson
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  Horowitz, Sequoia Capital, and Fidelity, puts XAI ahead of
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  Anthropic and Inflection by a huge margin.
• 0:52
  The funding is expected to close in the coming weeks, though XAI
• 0:55
  hasn't commented about this. The group of investors looks
• 0:59
  nearly identical to the ones that backed Musk's earlier.
• 1:01
  Ventures especially. SpaceX and Tesla.
• 1:04
  That familiarity likely helped compress timelines and inflate
• 1:08
  the valuation. Now investors are betting on two
• 1:11
  things. Musk's influence and XA is
• 1:13
  tight. Integration with XXAI runs Grok.
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  That's the chatbot on X. And Grok is already absorbing
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  real time content from X. Of course that creates a self
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  reinforced data loop. Grok learns from X, responds to
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  X users, and shapes the activity on the platform.
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  And no other AI startup has that level of user engagement built
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  into consumer facing products. That loop there now the $200
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  billion price tag reflects that built in user base more than any
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  specific product milestone. Unlike Open AI or Anthropic, XAI
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  hasn't released benchmark comparisons for Grok show it
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  beating competitors across widely accepted test sets.
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  Instead, it is focused on open sourcing earlier versions and
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  shipping frequent updates more recently, Croc 2.5.
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  Now, that model arrived in June and matched GPD 4 on multiple
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  tasks, though it still trails in more complex reasoning and code
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  generation than the others. Now, open source also plays a
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  central role in how Musk is positioning XAI.
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  The company has released the weights and architecture for
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  several versions of Grok, including the tokenizer and
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  training setup. How that move attracts
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  researchers and developers who want to build on top of XAI's
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  work. And it gives XAI access to
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  community driven improvements without hiring everyone
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  directly. And Musk has framed openness as
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  a necessity to avoid centralized control of AI.
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  It also sets XAI apart from open AI to stop releasing weights for
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  its best models after just GPT. 2X AI's financial strategy
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  mirrors what Musk is done with Tesla and SpaceX.
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  Raise a butt load of money, aggressively attach long term
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  growth stories and ignite short term profitability.
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  Now, this round is reportedly structured as a tender offer,
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  meaning investors are buying existing shares rather than
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  injecting injecting fresh capital.
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  Now that implies early Sai shareholders, including Musk
• 3:14
  himself, are cashing out some of their stakes at the new
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  valuation while still holding on to long term upside.
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  The company now plans to build its own supercomputer to support
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  future versions of Crock. Earlier this year, Musk
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  announced that XAI would build a system with 100,000 NVIDIA each
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  100 GPU's. It's nearly five times larger
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  than what Meta is currently running, and it would rank among
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  the largest AI compute clusters in the world.
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  And Musk wants it operational by the end of this year.
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  And it's there, pretty much if that timeline holds up, though,
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  if they get this done and it's perfect.
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  Would give XAI unprecedented hardware independence,
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  especially when combined with X's data firehose.
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  Now, unlike Open, AIXAI is tightly bound to a single
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  ecosystem. Everything is built and is
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  routed through X. That gives it a data advantage,
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  but also increases its platform risk.
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  If X continues to bleed users or struggle with ad revenue, that
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  drag could bleed into XA is momentum.
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  And at the same time, if Croc continues improving and X
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  regains relevance as an AI native platform, this flywheel
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  spins faster. XAI becomes the first company
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  for social media, and frontier models evolve inside the same
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  product. This funding around makes clear
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  that the bet isn't just on AI performance, though, It's on
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  Musk's ability to turn a medium platform into a huge data
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  engine. The strategy still has major
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  gaps, so Grok doesn't yet outperform Claude or GPD 4 in
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  most head to head evaluations. It lacks enterprise tools,
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  developer API's, or productivity integrations that competitors
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  have used to lock in users for a long time.
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  But none of that seems to matter to the investors buying in now.
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  Musk has already merged XAI and X Corp into a single company as
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  well. That move lets him shift
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  resources, staff, and product updates between teams without
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  regulatory friction. It also blurs the line between
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  social media and also the model lab that's going on at XAI.
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  Now Grok gets a built in user base, X gets an AI layer, and
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  the two grow together. All together now, this run gives
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  XAI more capital than any AI startup has ever raised in a
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  single. Go also sets expectations that
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  Grok will close the gap when rivals quickly try to take them
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  out. Investors aren't waiting for it
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  to catch up, though. They're betting that the
• 5:46
  combination of Musk X and open source Momentum will let it
• 5:51
  bypass traditional AI race dynamics entirely.
• 5:55
  Hey, thank you so much for listening today.
• 5:57
  I really do appreciate your support.
• 5:59
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• 6:07
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• 6:18
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• 6:23
  take care of yourselves and each other and I'll see you tomorrow.