Elon Musk’s xAI goes after OpenAI

An underappreciated forceHBOAIAIAILLMAIGPTAIAIAIGPUAIAIAIGPTAIAILLMLLMAIAIAIGPUVCAIAIAI’GPUAILLMAIAIAIAIAIAIAIAIAIFTCSGHVCAI AIAI USUSAI behind great technological change is intense—and petty—rivalry. In the “war of the currents” in the late 19th century, Thomas Edison electrocuted stray animals to discredit Nikola Tesla. A century later Steve Jobs traded insults with Bill Gates during a battle between Apple and Microsoft. Even “Silicon Valley”, a satirical series, starts with a feud—and the priceless quip: “These are billionaires, Richard. Humiliating each other is worth more to them than we will make in a lifetime.”In the world of generative artificial intelligence (), the scrap between and Sam Altman is in the same league. It is both silly and captivating. Silly because they insult each other, try to discredit each other’s chatbots and fight over who meant what almost a decade ago when they co-founded .Captivating because, fuelled by grievance, Mr Musk has created x, maker of a series of large language models (s) called Grok. It has its sights set on Open, now run by Mr Altman, which became wildly successful with the release of Chat two years ago. While Open was last valued at $157bn, x, which is less than two years old, is already reported to be worth $50bn.x is desperate to catch up. In September it fired up the world’s biggest supercomputer in Memphis, built in record time with 100,000 of Nvidia’s graphics processing units (s), at an estimated cost of $4.5bn. Mr Musk promised to double the size within a few months. x is raising money hand over fist: $5bn in its current round, according to the , on top of $6bn in May (Open has raised $6.6bn this year). The cash and computing power will help train the third generation of Grok, which Mr Musk, with his usual rambunctiousness, has promised will be “the world’s most powerful by every metric”. Time is of the essence: as Chat showed, the first model to display a superior level of intelligence can leave the rest in the dust.Mr Musk’s company has other advantages. The man attracts brilliant engineers; x recruits from the top labs as well as from Tesla, his electric-vehicle maker. The s are partly trained on data from X, Mr Musk’s social-media platform, which (for all its toxicity) provides up-to-the-minute information. x stands to benefit from familial ties with Tesla and SpaceX, Mr Musk’s rocket-and-satellite firm. Both generate valuable data on the real world: Tesla via the cameras that it hopes will support fully autonomous driving, and SpaceX via its view from space.Though some investors resent the way Mr Musk takes from one company to give to another, he argues that x will ultimately help him realise his dream of creating autonomous cars, “robotaxis” and humanoid robots. Such ambitions may help x get its hands on scarce s because Jensen Huang, Nvidia’s boss, shares Mr Musk’s sense of higher purpose. “What Elon is doing is so cutting-edge. Jensen loves that,” says Umesh Padval of Thomvest Ventures, a venture-capital () firm.Yet compared with Open, x is still an underdog. Opens partnership with Microsoft—though —gives it access to infrastructure not even the world’s richest man can match: Microsoft’s capital expenditures, mostly on s and data centres, are expected to exceed $150bn in 2024-25. Combining the products it sells directly to its customers with those sold via Microsoft gives Open a roughly 70% share of the market. That is still a big lead.The risk is that Mr Musk turns what should be robust corporate competition into a knife fight. Earlier in November he filed an amended lawsuit—the third version this year—against Open and its backers, with x as a plaintiff and Microsoft as a defendant for the first time.It repeats accusations that Mr Altman and his co-defendants abandoned a non-profit, safety-first mission, partly funded by Mr Musk, in order to get rich. Open disputes this. The suit’s latest allegations are that Open and Microsoft hobbled competition by restricting Open’s investors from putting money into rivals and through what it calls a de facto merger. In January the Federal Trade Commission, an antitrust body, launched an inquiry into Microsoft’s ties with Open, as part of a broad look at investments. Some Open investors fear that Mr Musk could use his influence with President-elect Donald Trump to encourage the to dig deeper.One of those investors, Alexandre Azoulay of Capital, a firm, accuses Mr Musk of using “lawfare” against Openrather than fair competition. But for its part, Open’s defensive strategy veers worryingly near to wrapping the company in the flag. One person close to Openportrays it as a champion in America’s tech war with China. Its innovation is “foundational to success—not just economic competitiveness but who prevails between the and China,” he says.In fact, America’s technological edge would be best served by both firms slugging it out in the marketplace, not by either of them pulling political and geopolitical strings. In the meantime, all the elements are in place for a blockbuster remake of “Silicon Valley” for the era.