Elon Musk Announces the Launch of New AI Company xAI, Crypto Tokens Surge

Elon Musk, the visionary CEO of Tesla and SpaceX and current owner of Twitter, has announced the birth of a brand-new artificial intelligence (AI) company, christened xAI. The company’s website stated that the venture’s mission is ambitious yet intriguing: to “understand the true nature of the universe.” Musk has promised to reveal more information in a live Twitter Spaces chat slated for Friday.

Establishing a Competitive Position

The team behind xAI is composed of luminaries from world-renowned tech giants such as DeepMind, OpenAI, Google Research, Microsoft Research, Twitter, and Tesla. They have previously been instrumental in developing key AI projects like DeepMind’s AlphaCode, and OpenAI’s GPT-3.5 and GPT-4 chatbots. Musk is poised to compete with other top-tier AI entities, including OpenAI, Google, and Anthropic, known for their leading-edge chatbots like ChatGPT, Bard, and Claude.

Reports of this venture had initially surfaced in the Financial Times in April, mentioning that Musk had acquired thousands of GPU processors from Nvidia to power a potential large language model. In the same month, Musk divulged his plans for a new AI tool dubbed “TruthGPT” in a Fox News Channel interview. Musk expressed his concerns about existing AI firms giving precedence to systems that promote political correctness.

AI Safety and Ethics

Dan Hendricks, executive director of the Center for AI Safety, will serve as one of the advisors to xAI. The Center, based in San Francisco, had published a letter in May, co-signed by tech leaders, advocating that the mitigation of AI-induced extinction risks should be as globally prioritized as other societal threats like pandemics and nuclear wars. The letter, however, faced criticism from several academics and ethicists who argued that this excessive focus on AI’s potential future threats overshadowed the existing damages certain algorithms inflict on marginalized communities.

According to xAI co-founder Greg Yang, the startup plans to explore the “mathematics of deep learning,” a core facet of AI. The aim is to “develop the ‘theory of everything’ for large neural networks,” an endeavor that promises to elevate AI to new heights.

Impact on Crypto Market

The unveiling of xAI sparked a surge in AI-related cryptocurrency tokens. SingularityNET (AGIX) and Fetch.ai (FET) posted gains of 11% and 7%, respectively, in the 24 hours following Musk’s announcement. Meanwhile, the unveiling of Musk’s xAI prompted Telegram’s Wallet to expand beyond its chat-centric payments mechanism and allow merchants to accept payments in cryptocurrency, thereby allowing transactions using tether (USDT), bitcoin (BTC), and toncoin (TON).

Polygon Token Upgrade Proposal

In parallel news, a token upgrade proposal from a group of Polygon founders and researchers was presented, suggesting the replacement of the MATIC token with POL. The proposal was well received, causing the MATIC value to surge by 2.6% to $0.747 within the first three minutes post-announcement. If approved, the new POL token would function as a single token across all Polygon-based networks, facilitating the operation of multiple chains by network validators.

The xAI Team and Future Recruitment Plans

Among xAI’s standout hires is Jimmy Ba from the University of Toronto, co-author of the highly cited “Adam” paper on optimization in deep learning. The company’s recruitment drive continues in the Bay Area, where most of the AI development is centered. The xAI website lists the company as independent of Musk’s other ventures, X Corp., but clarifies that they will “work closely with X (Twitter), Tesla, and other companies.”

A Footnote on Musk’s AI Journey

Musk’s involvement in AI dates back to the creation of OpenAI, the highly acclaimed AI startup, and developer of ChatGPT. However, after his exit from OpenAI’s board in 2018, Musk often criticized the company, especially after it established a for-profit subsidiary the following year. Despite these controversies, Musk remains an ardent advocate for responsible AI development, calling for a pause on training powerful AI models in March.

With the formation of xAI, Musk, already overseeing six companies, adds another feather to his cap. As per the latest regulatory filings, Tesla is “increasingly focused on products and services based on artificial intelligence, robotics, and automation.”

Musk’s diversified ventures often leverage shared resources. For instance, Tesla and SpaceX share a vice president of materials engineering. Similarly, engineers from Tesla “volunteered” to work at Twitter following Musk’s acquisition. With the inception of xAI, this trend seems poised to continue, promising synergies across Musk’s diverse portfolio of companies.

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