News | July 13th 2023

The Drum | Do Marketers Need To Pay Attention to Elon Musk’s Latest Venture, xAI?

Originally published in The Drum

Yesterday, billionaire entrepreneur Elon Musk officially announced his own artificial intelligence (AI) company, dubbed xAI. “The goal of xAI is to understand the true nature of the universe,” the company wrote on the homepage of its website.

Helmed by Musk – who's also the CEO of Tesla and SpaceX and the owner of Twitter – xAI has been staffed by a litany of prominent AI researchers who have previously served at industry-leading companies like Microsoft, Google and DeepMind.

"There's no question Musk is a publicity machine, but [xAI] is still worth marketers paying attention to thanks to the pedigrees of the people involved," says Mike Kaput, chief content officer at the Marketing AI Institute.

At the moment, little is known about what xAI actually intends to build. But according to multiple reports, it intends to compete directly with OpenAI, the San Francisco-based start-up which launched the uber-popular AI chatbot ChatGPT in November.

Musk was a co-founder of OpenAI but resigned from the board in 2018, citing disagreement with the company’s 2019 decision to transition from a nonprofit to a for-profit company, which since that time has been receiving significant financial backing from Microsoft. Since his departure from OpenAI, Musk has repeatedly voiced his disdain for the company. In March, for example, he tweeted: “OpenAI was created as an open source (which is why I named it 'Open' AI), non-profit company to serve as a counterweight to Google, but now it has become a closed source, maximum-profit company effectively controlled by Microsoft. Not what I intended at all."

In an April interview with Fox News anchor Tucker Carlson, Musk teased his plans to launch “TruthGPT," an AI model aimed at “maximum truth-seeking.” This was apparently supposed to contrast with ChatGPT, which Musk has intimated is “woke,” prone to misinformation and therefore “deadly”.

"Musk has previously rallied against what he sees as politically correct and censored language models, so we may see xAI differentiate itself along these lines," says Ajder. "Regardless of the quality of products and research xAI pursues, Musk’s star power will likely keep xAI in the media and with a core set of fans as eager users."

Musk was one of the signatories of an open letter, published in March by the Future of Life Institute, which called upon “all AI labs to immediately pause for at least six months the training of AI systems more powerful than GPT-4,” citing existential risk to humanity.

In light of the news about xAI, Northwestern University associate professor of marketing Jim Lecinski is skeptical about Musk's motivations for endorsing the open letter. "We now see why Musk was calling for a 6-month freeze: apparently to give himself time to catch up, while publicly framing the reason as an altruistic, societal one," he says. "Not a good way to engender trust in his new venture."

While it may be too early to precisely forecast the ripples that the launch of xAI will send throughout the marketing industry, Code and Theory cofounder and executive chairman Dan Gardner says that this is a development to which marketers should be paying close attention. "Any time Musk enters a category, he is looking to create disruption," Gardner says. "xAI is further proof that we will continue to see advancement at a rapid pace across all the AI companies and that it's too soon to choose a singular platform to bet your AI transformation on."

The launch of xAI arrives during a pivotal and tumultuous period for Twitter, which Musk purchased for a reported $44bn in October. Disgruntled users have been leaving the platform following controversial policy changes and inflammatory statements from Musk. Meanwhile, Mastodon and Meta’s new Twitter-lookalike Threads have provided viable alternatives to the bluebird app.

xAI’s website states that although it is not a part of X Corp – another Musk-founded company into which Twitter, Inc. was consolidated earlier this year – the company “will work closely with X (Twitter), Tesla, and other companies to make progress towards our mission.”

xAI said on its website that the company will host a Twitter Spaces event tomorrow, providing visitors with an opportunity to "meet the team and ask us questions."

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