Should Tesla Bet Big on Artificial Intelligence with $5 Billion Investment in xAI?
Elon Musk asks users if Tesla should invest $5 billion in xAI, a startup he founded to challenge Microsoft-backed OpenAI and Alphabet's Google in the AI race.
Artificial IntelligenceTeslaXaiElon MuskGenerative AiReal Estate MaharashtraJul 24, 2024
Musk founded xAI last year as a challenger to Microsoft-backed OpenAI and Alphabet's Google, which are among the leaders in the fierce race for generative AI dominance. xAI, valued at $24 billion, has already raised $6 billion in series B funding from investors including Andreessen Horowitz and Sequoia Capital.
The startup has begun training its large language model, Grok, on what Musk claims is the world's most powerful AI training cluster located in Memphis, Tennessee. The cluster boasts over 100,000 Nvidia H100 AI chips, giving it a significant advantage in training the world's most powerful AI.
Tesla, which reported its lowest profit margin in over five years, is looking to revive demand and increase spending on AI projects. The company expects its hardware-related profit to be accompanied by the acceleration of AI, software, and fleet-based profits. Musk earlier stated that Tesla will likely spend between $3 billion and $4 billion on its purchases of chipmaker Nvidia's hardware this year.
Of the $10 billion in artificial intelligence-related capital expenditure this year, around half would be internal spend, Musk said. The investment in xAI, if approved, would be a significant bet on the future of AI and its potential to drive growth for Tesla.
Information
Tesla is a US-based electric vehicle and clean energy company founded in 2003 by Elon Musk, JB Straubel, Martin Eberhard, and Marc Tarpenning. The company is headquartered in Austin, Texas.
xAI is an artificial intelligence startup founded by Elon Musk in 2022 as a challenger to Microsoft-backed OpenAI and Alphabet's Google in the AI race.
Tesla is committed to accelerating the world's transition to sustainable energy through its products, including electric vehicles, solar power systems, and energy storage systems.
xAI is focused on developing cutting-edge artificial intelligence technologies that can drive growth and innovation in various industries.
Frequently Asked Questions
What is the purpose of Elon Musk's poll on Tesla investing in xAI?
The poll is to 'test the waters' for a deal and gauge user sentiment on Tesla investing $5 billion in xAI.
What is xAI and its valuation?
xAI is an artificial intelligence startup founded by Elon Musk in 2022, valued at $24 billion.
What is Grok and where is it being trained?
Grok is a large language model being trained by xAI on what Elon Musk claims is the world's most powerful AI training cluster located in Memphis, Tennessee.
How much is Tesla expected to spend on Nvidia's hardware this year?
Tesla is expected to spend between $3 billion and $4 billion on its purchases of chipmaker Nvidia's hardware this year.
What is Tesla's expectations from its AI investments?
Tesla expects its hardware-related profit to be accompanied by the acceleration of AI, software, and fleet-based profits.
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