Elon Musk’s Artificial Intelligence Startup xAI Reportedly Nears $18 Billion Valuation With Fresh Funding As AI Race Heats Up

  

Elon Musk’s artificial intelligence startup xAI is near to closing a funding round that would value the company at $18 billion, Bloomberg reported on Thursday, funds that could boost the billionaire’s project as it works to gain ground on upstart rivals like OpenAI and Anthropic as well as see off competition from Big Tech giants including Meta, Microsoft, and Google.

Elon Musk's xAI is reportedly close to closing a new funding round. 

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Musk’s X.AI Corp. could close its latest funding round as soon as this week, Bloomberg reported, citing people familiar with the matter.

Details such as timing, valuation, and the size of the round are still up in the air, the unnamed sources told Bloomberg, noting that deliberations on the round are ongoing.

Previous reports from Bloomberg and other outlets including TechCrunch and The Information suggest Musk’s AI startup is raising $6 billion at a valuation of around $18 billion, up from reports of a deal worth around $3 billion at a $15 billion pre-money valuation due to intense investor interest.

Participants in the round reportedly include venture capital giant Sequoia Capital, a Silicon Valley titan with a long history of backing Musk’s projects, including the PayPal precursor X.com, tunneling business The Boring Company, rocket venture SpaceX, as well as supporting the billionaire’s efforts to take over Twitter, now X, in 2022.

Investors are reportedly being sold on Musk’s track record at Tesla and SpaceX, as well as company links to Musk’s social media platform X, a source of data that can be used to train large language models underpinning products like the Grok chatbot.

Apple sure got people to start paying attention to its latest iPads.

The tech giant unveiled its latest iPad models on May 7. But while the Cupertino-based company might have wanted people to focus on its blazing new chips and thinner form factor, some were taken aback by the product's accompanying commercial.

The minute-long ad titled "Crush!" showed various artistic tools — a turntable, a trumpet, a piano, and a collection of camera lenses — slowly crushed by a hydraulic press to make a shiny new iPad Pro.

The ad certainly made a statement, just probably not in the manner that Apple intended.

Apple CEO Tim Cook's X post of the video drew over 11,000 replies as of press time, with a large number of them panning the ad's visuals and message.

Meet the new iPad Pro: the thinnest product we’ve ever created, the most advanced display we’ve ever produced, with the incredible power of the M4 chip. Just imagine all the things it’ll be used to create. pic.twitter.com/6PeGXNoKgG

— Tim Cook (@tim_cook) May 7, 2024

"Who thought this was a good idea??" X user Joe B. Transue wrote in his reply to Cook. "Did you hire the one person that liked the scene in Who Framed Roger Rabbit where the bad guy dips the animated shoe in the toon-killing bath??"

Google Deepmind has unveiled the third major version of its “AlphaFold” artificial intelligence model, designed to help scientists design drugs and target diseases more effectively.

In 2020, the company made a significant advance in molecular biology by using AI to successfully predict the behavior of microscopic proteins.

With the latest incarnation of AlphaFold, researchers at DeepMind and sister company Isomorphic Labs—both overseen by cofounder Demis Hassabis—have mapped the behavior of all of life’s molecules, including human DNA.

The interactions of proteins—from enzymes crucial to human metabolism to the antibodies that fight infectious diseases—with other molecules are key to drug discovery and development.

DeepMind said the findings, published in research journal Nature on Wednesday, would reduce the time and money needed to develop potentially life-changing treatments.

“With these new capabilities, we can design a molecule that will bind to a specific place on a protein, and we can predict how strongly it will bind,” Hassabis said in a press briefing on Tuesday.

“It’s a critical step if you want to design drugs and compounds that will help with disease.”

The company also announced the release of the “AlphaFold server”, a free online tool that scientists can use to test their hypotheses before running real-world tests.

Since 2021, AlphaFold’s predictions have been freely accessible to non-commercial researchers, as part of a database containing more than 200 million protein structures, and has been cited thousands of times in others’ work.

DeepMind said the new server required less computing knowledge, allowing researchers to run tests with just a few clicks of a button.

John Jumper, a senior research scientist at DeepMind, said: “It’s going to be really important how much easier the AlphaFold server makes it for biologists—who are experts in biology, not computer science—to test larger, more complex cases.”

Dr. Nicole Wheeler, an expert in microbiology at the University of Birmingham, said AlphaFold 3 could significantly speed up the drug discovery pipeline, as “physically producing and testing biological designs is a big bottleneck in biotechnology at the moment”.

Others offered backhanded compliments to Apple, saying that the ad could be a masterpiece if it were meant to be a critique of tech giants.

"Is this intentionally a metaphor for the damage to the things of value to humanity wrought by tech bros and gen AI for profit/greed? If so, bravo!" another person told Cook.

Some felt the commercial missed the mark compared to Apple's past work. The company made waves with its "1984" Super Bowl ad when it introduced its first Macintosh computer in the 80s.

"Maybe hire Ridley Scott again next time instead," read one X post referencing the award-winning director behind the "1984" ad.

Venture capitalist and Y Combinator cofounder Paul Graham went a step further with his review of the ad.

Apple's commercial, Graham said, would've been an insult to the company's late founder, Steve Jobs.

"Steve wouldn't have shipped that ad. It would have pained him too much to watch," Graham said in his reply to Cook.

Jobs, who handed the reigns to Cook before passing away in October 2011, often sought to portray Apple as lying at the intersection of arts and technology.

"It is in Apple's DNA that technology alone is not enough—it's technology married with liberal arts, married with the humanities, that yields us the results that make our heart sing," Jobs said when he unveiled the iPad 2 in March 2011.

Representatives for Apple didn't immediately respond to a request for comment from BI sent outside regular business hours.

Homebuying has become increasingly harder for lower-income Americans as housing affordability hit an all-time low in 2023, driven by soaring home prices and mortgage rates, which persisted into early 2024, according to Redfin.

Around 26% of new mortgages in 2023 were issued to low-income Americans, who earn 80% or less of their area median income, down from 31% in 2020, a new Redfin report found.

High-income earners, who earn 121% or more of their area median income, accounted for nearly half (44.8%) of the new mortgages in 2023, up from 41.2% in 2020.

The Midwest and some East Coast metros remain relatively affordable to low-income earners if new mortgages are any indication: they make up 50.4% of new mortgages in Detroit, followed by Philadelphia (49.2%), Minneapolis (44.3%) and Cleveland (40.6%).

California metros and Miami accounted for the lowest percentages of new mortgages issued to low-income earners, with Anaheim being the lowest at 3.8%, followed by Miami (5%), Los Angeles (5.2%), San Diego (6.3%) and San Francisco (7.9%).

In 2023, homebuyers with the typical local income had to spend over 80% of their pay on monthly housing costs to buy a median-priced home in San Francisco (85.4%), followed by Los Angeles (72.9%) and San Diego (64.6%).

In contrast, Detroit (18.5%) and Pittsburgh (23.5%) were the most affordable cities, according to Redfin's December report.

Staff trust in the Federal Deposit Insurance Corporation's leadership has fallen sharply to well below government averages, with a growing number of workers considering leaving the agency, the latest FDIC staff survey data obtained by Reuters shows.

In 2023, 38% of FDIC staff were considering leaving within the next 12 months, more than double that of 2020, compared with only 33% government-wide, the data shows.

Only 39% of staff said FDIC leadership inspires strong "motivation and commitment," down from 61% in 2020 and 11 percentage points below the government average, the data obtained via the Freedom of Information Act showed.

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The survey was conducted for the FDIC from Aug. 7 to Sept. 29, 2023 by the Office of Personnel Management, a U.S. agency which oversees civil servants and annually conducts worker surveys.

A damning independent review into FDIC misconduct published on Tuesday cited elements of the 2023 staff survey data. The agency has not released the full survey results.

The data provides more insight into the extent of low morale and staff disgruntlement at the agency where the potential for high staff turnover could threaten its ability to oversee lenders when many are struggling due to high interest rates.

An FDIC spokesperson said the survey was an "important tool" for measuring staff attitudes which informed FDIC recruiting and retention efforts, which had been improving over the last year.

The FDIC's internal watchdog warned in two recent, opens new tab reports, opens new tab that hiring remained below pre-pandemic levels and that high attrition rates could compromise "mission-critical" functions. Staff turnover contributed to failings in the FDIC's supervision of collapsed lender Signature Bank, an agency postmortem found.

"Higher attrition rates in 2021 and 2022 were directly related to the pandemic-related issues and a robust labor market and have since fallen to more historical levels," the FDIC statement said. Hiring of entry-level examiners last year was double that of 2021, it added.

Tuesday's report, sparked by a Wall Street Journal expose in November, revealed a culture that had tolerated sexual harassment, discrimination and other misconduct for years.

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In recent years, the FDIC's handling of its return-to-office policy has been a major driver of discontent, said Vivian Hwa, president of the National Treasury Employees Union chapter representing workers at the FDIC's Washington headquarters. She said the FDIC began reneging in 2022 on an agreement to allow workers to report to the office on an as-needed basis.

Workers are often called to the office arbitrarily and with no clear business purpose, said Doreen Greenwald, national president of the National Treasury Employees Union.

More than 80% of employees who said they were considering leaving cited remote work arrangements as a factor.

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According to the review of sexual harassment published on Tuesday, the return to office policy was a "particular point of dissatisfaction" among staff.

"It was the way they went about it, the fact that employees didn't feel they were consulted or had input into the process," Hwa said.

The proportion of staff who felt leadership involved them in decisions that affect their work lives fell to just 39% in 2023, down 17 points from 2020, the data showed.

The Journal expose also validated the view among many staff that FDIC bosses had not sufficiently addressed misconduct which likely contributed to the steady decline in ratings, Hwa added.

"People were aware of those issues for a long time. ... Over time, there were actions and behaviors on behalf of FDIC management which led to employees feeling they were not empowered," Hwa said.

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The share of FDIC staff who said they felt management maintained "high standards of honesty and integrity" dropped to 56% from 74% in 2020. Only 52% of staff expressed a "high level of respect" for FDIC leadership, down from 73% three years earlier.

By comparison, the government average for both metrics has held steady at around 60% over the same period.