Tesla’s CEO Elon Musk is reportedly building an AI startup to take in ChatGPT’s parent company OpenAI. While Musk was among OpenAI’s co-founders he has criticized the company and was also a signatory to a letter calling for a pause on AI.
The Financial Times reported that Musk is in talks with several Tesla and SpaceX investors for investing in the startup. The person said, “A bunch of people are investing in it . . . it’s real and they are excited about it.”
To be sure, given the success of Tesla as well as SpaceX, Musk shouldn’t face many troubles in attracting investors.
His Twitter acquisition admittedly hasn’t been financially fruitful in the first six months and he valued the company at half the acquisition value.
Musk reportedly building an AI team
Musk has reportedly bought thousands of high-power GPU processors from Nvidia for his AI venture. Nvidia sees a massive opportunity in AI chips especially as PC sales have fallen after the pandemic boost.
Musk is reportedly hiring from AI labs including DeepMind. Notably, Musk has called AI “dangerous” and called for its greater regulatory oversight.
In March, he led an open letter signed by several tech executives including Apple co-founder Steve Wozniak calling for a pause on AI models like ChatGPT.
The letter said, “we call on all AI labs to immediately pause for at least 6 months the training of AI systems more powerful than GPT-4. This pause should be public and verifiable, and include all key actors. If such a pause cannot be enacted quickly, governments should step in and institute a moratorium.”
Sam Altman addressed Musk’s letter
Recently, OpenAI CEO Sam Altman addressed the letter. Altman said, “I think moving with caution and an increasing rigor for safety issues is really important.” Previously also Altman admitted that AI made him a “little bit scared.”
Speaking at an MIT event Altman said, “The letter I don’t think was the optimal way to address it.” He added, “We are doing other things on top of GPT-4 that I think have all sorts of safety issues that are important to address and were totally left out of the letter.”
Microsoft has committed multi-billion dollars to OpenAI
Earlier this year, Microsoft announced a multi-year, multi-billion-dollar investment in OpenAI. Microsoft is betting on generative AI to counter Google’s dominance in online search.
To be sure, Google also came up with Bard, its ChatGPT-like chatbot. However, Bard had a disappointing debut and Alphabet lost $100 billion in market cap after its release.
Google meanwhile sounds quite optimistic about Bard. Pichai said, “Bard seeks to combine the breadth of the world’s knowledge with the power, intelligence and creativity of our large language models. It draws on information from the web to provide fresh, high-quality responses.”
Google launched its Bard chatbot
Bard’s success would be crucial for Google-parent Alphabet as the company battles slowing growth and rising competition. In Q4 2022, Alphabet’s revenues rose only about 1% YoY. Both Google search and YouTube revenues fell in the quarter. For YouTube, it was the second consecutive quarter of degrowth.
Along with the slowdown in the digital ad market, YouTube also faces headwinds from TikTok. Amid slowing growth, last month, Alphabet announced that it is trimming its workforce by 12,000, or 6%. Many other US tech companies with the notable exception of Apple have also announced mass layoffs. Companies relying on digital ad dollars have especially been hit hard.
Chinese companies have also launched AI chatbots
Coming back to generative AI, not to be left behind, Chinese tech giants like Alibaba and Baidu have also announced ChatGPT-like offerings. Baidu’s Ernie chatbot got mixed reviews, but the company said that it is working to make it better.
Musk already manages multiple companies
Meanwhile, Musk already manages multiple companies like Tesla, SpaceX, Neuralink, the Boring Company, as well as Twitter.
Incidentally, one of the reasons Tesla stock fell last year was because markets were apprehensive that the mercurial CEO would need to split his time in managing Twitter.
Even as Musk claims that Twitter is now approaching breakeven and many advertisers who quit after his takeover have returned to the platform, the social media company’s turnaround is far from over.
The company is also facing lawsuits from landlords, vendors, and consultants over unpaid bills.
Musk is trying to turn around Twitter
Musk has been on a cost-cutting spree and has taken aggressive actions to lower the company’s cost base including shutting down some offices. Musk’s acquisition has especially been a disaster from an HR standpoint.
Musk fired the company’s top executives soon after he acquired the company in October. He has since been slashing the company’s workforce and Musk admitted that Twitter’s headcount is now only about 20% of what it was before his acquisition.
Musk called upon Twitter employees to either commit to “hardcore” work or quit the company.
As he tries to hire AI experts, many wonder whether he would be able to attract quality tech talent given how he managed Twitter’s workforce post-acquisition.
Even Tesla’s HR policies have also been under scrutiny for issues ranging from racial discrimination to firing workers because they wanted to form a union.
AI battle is heating up
All said, the AI battle is heating up and it’s not surprising that Musk also wants to try his hands at the emerging technology. He is known to push the limits and even his detractors might admit that he has led the EV pivot from the front.
Just about a decade back, legacy automakers dismissed electric cars as a fad. In 2014 Fiat Chrysler Automobiles’ then-CEO Sergio Marchionne, who passed away in 2018, asked buyers not to buy the company’s electric cars as it was a losing proposition for Fiat.
Fast forward to 2023, and all the leading automakers have committed billions of dollars to EVs.
Could Musk repeat the same magic with AI? We’ll have to wait and see.