Elon Musk’s startup focused on artificial intelligence stands to receive a significant boost in the competitive landscape as xAI races to keep pace with competitors like OpenAI and Anthropic.
Sources close to the CEO of Tesla and SpaceX are currently in discussions to support xAI in securing a \(3 billion funding round, potentially valuing the company at \)18 billion. Notably, Steve Jurvetson and the venture capital firm Gigafund are among the potential investors, as reported by the Wall Street Journal.
Jurvetson, a confidant of Musk’s, sits on the board of SpaceX and has previously been a member of Tesla’s board. Similarly, Luke Nosek, a co-founder of Gigafund, is also on SpaceX’s board and is associated with the “PayPal mafia,” a group that includes Musk, according to the Journal.
While xAI has not responded to requests for comments from Fortune and the Journal, Musk established xAI last year as a competitor to OpenAI, the parent company of ChatGPT. Despite his co-founding role in OpenAI, Musk filed a lawsuit against the organization, alleging a deviation from its original nonprofit mission. xAI recently introduced its chatbot named Grok, with an updated version released last month.
The news of the potential \(3 billion fundraising round underscores xAI’s pursuit of additional capital, especially in light of OpenAI’s \)13 billion commitment from Microsoft and Anthropic’s $6 billion funding, supported by tech giants like Google and Amazon.
In the realm of artificial intelligence talent acquisition, xAI and its counterparts are engaged in a fierce competition. Recent reports revealed that Tesla’s Ethan Knight became the fourth engineer to join xAI, prompting Musk to address the talent war in the AI industry, particularly with OpenAI aggressively recruiting Tesla engineers. Musk emphasized the intense competition for AI talent, acknowledging the challenges of retaining skilled professionals in this field.
As tech companies vie for a limited pool of AI experts, the competition for individuals with advanced skills in training large language models and troubleshooting new AI platforms intensifies. The escalating demand for such specialized talent has led to soaring compensation packages, with the median salary at OpenAI reportedly reaching $925,000, inclusive of bonuses and equity.
Despite the lucrative offers in the AI sector, a significant percentage of AI creators and heavy users are considering leaving their current roles within the next few months, as highlighted in a recent report by McKinsey. This trend is reflected in the departure of high-level AI employees from companies like Meta, where efforts to retain top AI talent involve personal appeals from CEO Mark Zuckerberg.
The challenges of attracting and retaining top AI talent underscore the competitive landscape and the critical role of skilled professionals in driving innovation and advancement in the field of artificial intelligence.
