Various signs indicate that as xAI, the artificial intelligence startup of former world's richest person Elon Musk, approaches its one-year anniversary, the company is accelerating its layout in the AI field, with its presence in the capital market continuously strengthening.
According to the latest reports, xAI is not only competing with Musk's "old rival" Zuckerberg for the opportunity to collaborate with the custom chatbot team Character.ai, but the news about the company's efforts in building computing power is also attracting attention.
Clashing with Zuckerberg
Following Musk's acquisition of Twitter (now renamed X), he has become a direct competitor to Meta's CEO Zuckerberg. The unique demand of social media platforms for custom chat AIs has led them to knock on the doors of Silicon Valley startup Character.ai simultaneously.
Character.ai is a company specializing in developing an AI chatbot creation platform, dedicated to creating chatbots with the language style of simulated real characters (such as Huang Renxun, Einstein) or virtual characters (such as a character from the game "Genshin Impact").
It is worth noting that Noam Shazeer, the founder of Character.ai, was one of the authors of the Google Transformer paper years ago. After many years, these Google researchers who pioneered the new landscape of AI today have embarked on the path of entrepreneurship.
Several sources have revealed that Meta and xAI have engaged in early discussions with Character.ai, focusing on research collaborations such as model development and pre-training. Meta has previously announced plans to integrate AI chatbots into platforms like Facebook and Instagram, including some bots designed to "play the role of celebrities." Meanwhile, xAI has developed the chatbot Grok for subscription users on the X platform.
For Musk and Zuckerberg, developing personalized AI characters offers a unique advantage due to their access to vast amounts of social media data. Musk disclosed plans for xAI to construct a remarkable supercomputer, referred to as a "computing super factory," during an investor presentation in May. Musk mentioned that training the Grok 2 model would require around 20,000 Nvidia H100 GPUs, with future models necessitating up to 100,000 of these chips.
In typical Musk fashion, he intends to consolidate all chips into a single "supercomputer." Musk informed investors that if successful, this project would be at least four times larger than the current largest GPU cluster. Musk expressed personal commitment to driving the machine to operational status by the fall of 2025 and hinted at potential collaboration with Oracle in developing this massive computer.
Despite Tesla's development of the Dojo supercomputer, the demand for Nvidia chips remains high for the "computing super factory." Musk publicly praised Nvidia's AI hardware as the "best" in a March press release from Nvidia's Blackwell division.
It is worth mentioning that in mid-month, there was news that xAI was close to reaching a multi-year, "billion-dollar" cloud computing supply agreement with Oracle, which briefly boosted Oracle's stock price. Continuously procuring computing power while also building its own "computing super factory," xAI's efforts to catch up with market leaders are becoming increasingly evident.
According to sources familiar with the matter, xAI is seeking financing with a valuation target of $24 billion, planning to raise over $6 billion in the coming weeks. Roughly estimated, this amount of money could buy around 200,000 H100 chips.
From the perspective of major AI companies, $6 billion is likely only enough to sustain operations for 1-2 years. Musk himself has acknowledged that to be competitive in the AI race at this stage, one needs to spend at least tens of billions of dollars annually.
On a side note: AI giants have long been laying out strategies in the "general AI race."
With Nvidia once again delivering a financial report this week that validates the AI market's vitality, the U.S. stock market is showing new trends—aside from trading chip stocks, funds are also moving towards sectors related to data centers such as electricity, power plants, electrical equipment, and photovoltaics.
Naturally, Musk's Tesla has a mature energy storage business and is also a supplier to many solar power plants and photovoltaic equipment manufacturers.
Oklo, a nuclear fusion startup invested in by OpenAI CEO Sam Altman, made its debut on the U.S. stock market in mid-month. The company's CEO, Jacob DeWitte, stated in an interview this week that currently, 80% of customers inquiring about power purchases are data center operators, and he expects this trend to be just the "tip of the iceberg," with even more demand from data centers in the future.
Oklo announced this week that it has signed a power supply agreement for a 100-megawatt scale data center campus. However, the company has not yet obtained permission to build small nuclear power plants, and DeWitte also mentioned that it is unlikely for these plants to be operational before 2027.
