Tag Archives: xAI

Elon Musk’s XAI Files Lawsuits Against OpenAI Alleging Trade Secret Theft | Technology

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Elon Musk’s artificial intelligence venture, Xai, has accused its competitor OpenAI of unlawfully appropriating trade secrets in a fresh lawsuit, marking the latest in Musk’s ongoing legal confrontations with his former associate, Sam Altman.

Filed on Wednesday in a California federal court, the lawsuit claims that OpenAI is involved in a “deeply nasty pattern” of behavior, where former Xai employees are allegedly hired to gain access to crucial trade secrets related to the AI chatbot Grok. Xai asserts that OpenAI is seeking unfair advantages in the fierce competition to advance AI technology.

According to the lawsuit, “OpenAI specifically targets individuals familiar with Xai’s core technologies and business strategies, including operational benefits derived from Xai’s source code and data center initiatives, which leads these employees to violate their commitments to Xai through illicit means.”


Musk and Xai have pursued multiple lawsuits against OpenAI over the years, stemming from a long-standing rivalry between Musk and Altman. Their relationship has soured significantly as Altman’s OpenAI continues to gain power within the tech industry, while Musk has pushed back against AI startup transitions into for-profit entities. Musk attempted to intervene before AI startups shifted to profit-driven models.

Xai’s recent complaint alleges that it uncovered a suspected campaign intended to sabotage the company while probing the trade secret theft allegations against former engineer Xuechen Li. Li has yet to respond to the lawsuit.

OpenAI has dismissed Xai’s claims, dubbing the lawsuit as part of Musk’s ongoing harassment against the company.

A spokesperson for OpenAI stated, “This latest lawsuit represents yet another chapter in Musk’s unrelenting harassment. We maintain strict standards against breaches of confidentiality or interest in trade secrets from other laboratories.”

The complaint asserts that OpenAI hired former Xai engineer Jimmy Fraiture and an unidentified senior finance official in addition to Li for the purpose of obtaining Xai’s trade secrets.

Additionally, the lawsuit includes screenshots from emails sent in July by Musk and Xai’s attorney Alex Spiro to a former Xai executive, accusing them of breaching their confidentiality obligations. The former employee, whose name was redacted in the screenshot, replied to Spiro with a brief email stating, “Suck my penis.”

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Before becoming a legal adversary of OpenAI, Musk co-founded the organization with Altman in 2015, later departing in 2018 after failing to secure control. Musk accused Altman of breaching the “founding agreement” intended to enhance humanity, arguing that OpenAI’s partnership with Microsoft for profit undermined that principle. OpenAI and Altman contend that Musk had previously supported the for-profit model and is now acting out of jealousy.

Musk, entangled in various lawsuits as both a plaintiff and defendant, filed suit against OpenAI and Apple last month concerning anti-competitive practices related to Apple’s support of ChatGPT within its App Store. The lawsuit alleges that his competitors are involved in a “conspiracy to monopolize the smartphone and AI chatbot markets.”

Altman took to X, Musk’s social platform, stating, “This is a surprising argument given Elon’s claims that he is manipulating X for his own benefit while harming rivals and individuals he disapproves of.”

Xai’s new lawsuit exemplifies the high-stakes competition in Silicon Valley to recruit AI talent and secure market dominance in a rapidly growing multi-billion-dollar industry. Meta and other firms have actively recruited AI researchers and executives, aiming to gain a strategic edge in developing more advanced AI models.

Source: www.theguardian.com

Xai Secures $200 Million US Military Contract Following Grok Chatbot Controversy

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Following the identification of Grok Chatbot as “Mechahitler” and its generation of anti-Semitic content, Elon Musk’s company, Xai, announced a contract worth $200 million with the US Department of Defense. This contract focuses on the development and deployment of artificial intelligence tools for agents.

Additionally, the DOD announced a ceiling of $200 million and similar contracts on Monday with several other prominent AI developers, including Google, Anthropic, and OpenAI. The agency collaborates with the General Services Bureau to make these AI tools accessible to the federal government.

“Incorporating off-the-shelf solutions into a cohesive functional approach will enhance the use of intelligence, business, and enterprise information systems as part of the Warfighting domain’s essential tasks.”


This agreement enhances ties with US military AI developers and is expected to broaden the application of artificial intelligence within the US government. This follows Musk’s so-called “Government Efficiency Office” (DOGE), which has been scrutinized for its oversight in various federal agencies. Until recently, Musk was considered the unofficial leader of DOGE, particularly as he navigated challenges posed by government entities. For more department inquiries, utilize the GROK chatbot.

The announcement of the Xai contract comes on the heels of Grok’s series of controversial posts on X last week, including the endorsement of Nazi ideology and disturbing themes, leading the company to issue a public apology. Xai asserted that the issue was addressed and subsequently launched a new AI model, offering an advanced version of the tool for a $300 monthly subscription.

The DOD contract is set to boost revenue as Xai strives to compete with more established AI firms such as OpenAI, led by Musk’s former ally, Sam Altman. Musk aims to significantly elevate Xai’s profile while leveraging other ventures within his tech empire for its growth. SpaceX’s investment in Xai totals $2 billion, providing a launchpad for startups to leverage X, formerly known as Twitter. Tesla shareholders have a stake in Xai as well.

Xai introduced the “Grok for Government” initiative in a blog post on Monday, detailing plans to develop AI-powered applications for potential use in healthcare, national security, and other public services, in addition to existing products.

“Under the Grok umbrella for government, we provide top-tier AI tools to federal, state, local, and national security clients,” Xai stated in its website announcement. “These clients can expedite American progress with Grok family products, enhancing the efficiency of daily government services and utilizing AI to tackle longstanding challenges in basic science and technology.”

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Musk has frequently voiced concerns that AI chatbots are designed to disseminate “woke” ideologies, while Grok products have promised to “pursue the fullest truth.” The platform has faced repeated controversies for spreading conspiracy theories and falsehoods, including claims of purported “white genocide” in South Africa, a narrative that Musk himself has echoed earlier this year – Echos claims purportedly made by Musk.

Ethics watchdogs, democratic lawmakers, and privacy advocates have raised alarms regarding Musk’s and DOGE’s handling of AI within government settings and the access to sensitive information while integrated with government agencies. Staff at DOGE had previously facilitated the transfer of government data to tailored iterations of Grok’s chatbots, raising concerns over potential breaches of privacy and security legislation. Reuters reported in May.

Source: www.theguardian.com

Elon Musk’s Xai Secures Approval for Methane Gas Generator in Tennessee

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Elon Musk’s AI venture, Xai, has received authorization to use methane gas generators at a significant data center located in Memphis, Tennessee. The county health department approved permits for 15 generators on Wednesday, a decision that has ignited protests from local communities and environmental advocates who argue that the generators will pollute the area.

“Our local officials are meant to safeguard our right to clean air, yet we are witnessing their failures,” stated Keshaun Pearson, the director of the Memphis community environmental nonprofit.

Xai established a sizable data center in Memphis about a year ago and introduced several portable methane gas generators to address the facility’s high energy demands. Although Xai lacked permissions for these generators, they seem to have exploited a loophole allowing the turbines to operate unless stationed at the same site for over 364 days.

In January, Xai sought approval for 15 generators. After extensive public meetings and community protests, the Shelby County Health Department approved the request. Satellite images provided to the Guardian by the Southern Environmental Law Center, a reputable nonprofit, reveal that at least 24 turbines remain operational at the Xai facility as of Tuesday.

“Xai welcomes the decision announced today,” said a company spokesperson in a statement. “Our on-site power generation utilizes state-of-the-art emission control technology, making this facility one of the cleanest in the nation.”

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Environmental organizations question the actual emissions from Xai’s electricity usage. Research by the Southern Environmental Law Center indicates that these turbines could emit thousands of tons of harmful nitrogen oxides and toxic substances like formaldehyde.

“The decision to issue air permits to Xai for contaminated gas turbines dismisses the opinions of countless Memphians who opposed this permit,” remarked Amanda Garcia, a senior lawyer at the Southern Environmental Law Center. She noted that the health department is permitting another contaminant to set up operations in an already burdened community without adequate safety measures.

Situated in an industrial area of Memphis, Xai is surrounded by neighborhoods that have long struggled with pollution issues. This historically black community faces elevated rates of respiratory diseases and asthma and has a shorter lifespan compared to other regions of the city. Studies indicate that these areas show a cancer risk four times higher than the national average.

The pollution from Xai’s operations, particularly affecting nearby black neighborhoods, has drawn attention from civil rights groups like the NAACP, which has filed a lawsuit against the company. They allege that Xai is in breach of the Clean Air Act by unlawfully installing and operating a methane gas generator.

“The NAACP is hopeful that the 15 generators at Xai will enhance transparency and accountability regarding methane emissions, yet this decision overlooks the objections of the community. We remain committed to holding both Xai and the health department accountable,” they stated.

Source: www.theguardian.com

Elon Musk’s XAI Engages in New Fundraising Discussions

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Xai, an AI startup founded by Elon Musk, is currently negotiating new funding that could elevate its valuation to between $80 billion and $120 billion, a notable increase from just over a month ago.

Sources speaking on condition of anonymity indicated that these discussions are in the preliminary stages and the company’s valuation could fluctuate as negotiations continue. Investors are contemplating a potential investment of $20 billion in Xai, though this figure may vary.

These discussions come on the heels of significant fundraising efforts by OpenAI, the San Francisco-based startup that announced a fundraising round valued at $300 billion in March. The launch of ChatGPT in late 2022 sparked an AI boom, leading to substantial investments in various AI companies, including Xai.

Presently, Xai is linked to Musk’s social media venture, X. In March, Musk claimed to have sold X to Xai, stating that the trading of all shares valued Xai at $80 billion and X at $33 billion. Xai’s earlier valuation from a funding round in December was approximately $40 billion.

Grok, a chatbot developed by Xai, is trained using data from X users and is accessible via the platform. According to X’s banker, a segment of the social media company’s revenue is derived from Xai.

Interest in AI firms waned towards the end of last year as numerous notable startups merged with major tech companies like Google and Amazon. Despite this, Xai and OpenAI remain among the few seeking billions to develop crucial AI technologies.

Musk has not responded to inquiries regarding Xai. Previous reports have detailed the ongoing discussions, as mentioned by Bloomberg.

(The New York Times has sued OpenAI and its partner Microsoft over allegations of copyright infringement concerning news content related to AI systems.)

Musk, along with entrepreneur Sam Altman and others, co-founded OpenAI in 2015 but departed from the organization about two years later following a disagreement over its direction when it was still a non-profit entity.

After Musk’s exit from OpenAI, Altman transitioned it into a for-profit model, enabling the acquisition of the significant funding required to advance AI technologies that learn by analyzing vast amounts of digital data.

Following the launch of ChatGPT in 2022, Musk established Xai, creating similar technology. Concurrently, Musk filed a lawsuit against OpenAI, alleging that OpenAI and its founders, Altman and Greg Brockman, had violated the company’s incorporation agreement by prioritizing commercial interests over public benefit. Musk eventually withdrew the lawsuit in August after initially reviving it in federal court months earlier.

Source: www.nytimes.com

Elon Musk’s Xai Faces Accusations of Contaminating Memphis Supercomputers

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Controversy surrounds Elon Musk’s artificial intelligence company in Memphis, Tennessee, where a massive supercomputer for his company Xai is being constructed. Local residents and environmental activists are concerned about the significant air pollution generated by the supercomputer since it was activated last summer. Despite this, some local officials have defended Musk, citing his investments in Memphis.

A hearing with the Health Department is scheduled for Friday to address the various perspectives on the issue. Xai has distributed flyers claiming low emissions to residents in the historically black neighborhood. Meanwhile, Environmental Groups have gathered data on the pollution levels produced by AI companies.

Recently, the Southern Environmental Law Center disclosed that Xai had quietly installed 35 portable methane gas turbines without the necessary air permits to power the supercomputer. Satellite images of the facility confirmed this discovery, raising concerns about the environmental impact.

Memphis Mayor Paul Young stated in a public forum that only 15 out of the 35 turbines at Xai’s site were in use, with the company having pending permit applications for the rest.

Memphis thermal image. Photo: Steve Jones/Flight by Southwings for the South Environmental Law Center: Steve Jones/Flight by South Wings

Recent thermal imaging of Xai’s site revealed significant heat emissions from the turbines, indicating their operation during the imaging. Environmental advocates are raising concerns about the lack of oversight and transparency in Xai’s operations.

The Southern Environmental Law Center criticized Xai for operating multiple methane gas turbines without proper permits or public scrutiny. The community surrounding Xai is calling for stricter regulations and monitoring of the company’s environmental impact.

Despite community concerns, Musk continues to expand Xai’s infrastructure in Memphis, aiming to double its computing power and energy storage capacity.

The energy-intensive operations of artificial intelligence companies like Xai contribute to air pollution and health concerns in nearby residential areas. The community is demanding greater transparency and accountability from Xai to protect their health and environment.

Xai flyer sent to Memphis residents. Photo: Courtesy of Keshaun Pearson

Local residents are pushing for more transparency and regulation of Xai’s operations, citing health risks from methane gas emissions. Efforts are underway to challenge misinformation and ensure a clean and safe environment for all community members.

Source: www.theguardian.com

Elon Musk’s Xai Firm Acquires Social Media Platform X for $330 Billion

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Elon Musk’s Xai artificial intelligence company has purchased Musk’s X, a social media platform formerly known as Twitter, for $330 billion, showcasing the billionaire’s rapid integration strategy.

The deal, announced on Friday, merges two of Musk’s numerous portfolio companies, including Tesla and SpaceX, potentially aiding Musk in training his AI model, Grok.

In a post on X, Musk declared, “The future of Xai and X are intertwined. Today, we have taken a step towards combining data, models, calculation, distribution, and talent.”

There has been no immediate response from X or Xai representatives to requests for comment. Many transaction details remain unknown, including investor compensation, integration of X’s leadership into the new company, and potential regulatory examination.

Paolo Pescatore, an analyst at PP, described the development as “surprising and somewhat unexpected.” He added, “To some extent, it marks the end of a tumultuous chapter for X.”

Gil Luria, an analyst at Da Davidson & Co, noted, “The $45 billion price tag is no coincidence, exceeding Twitter’s 2022 Take-Private Transaction by $1 billion. This move allows Xai investors to share the value of the business with X co-investors.”

Musk, the world’s wealthiest individual, has accumulated significant power in Washington, D.C., overseeing government efficiency and cost-cutting efforts during the Trump administration through Doge. This positions him to potentially influence the institutions overseeing his business dealings.

Xai investors, now part of the combined entity, expressed no surprises over the deal, viewing it as a merger of leadership and management teams within Musk’s own organization. They rejected the proposed name change.

While Musk did not seek investor approval, both companies are working closely together to deepen integration with Grok.

According to reports, Musk’s Xai startup commenced two years ago and secured $10 billion in funding, valuing it at $75 billion.

In February, Musk made a $97.4 billion bid for Openai, a ChatGpt maker consortium, which was subsequently rejected. Musk co-founded Openai in 2015 with CEO Sam Altman.

Musk has been involved in direct competition with Openai, filing a lawsuit in California federal courts to prevent rivals from transitioning from non-profits to commercial entities. A judge recently denied a request for a provisional injunction to block the conversion.

The widespread adoption of AI software has sparked increased investment and competition in Silicon Valley. Companies are seeking ways to integrate software across various business functions for improved efficiency.

As AI competition intensifies, Xai is enhancing its data centers to train more advanced models. Their supercomputer cluster, Colossus, located in Memphis, Tennessee, is touted as the world’s largest.

In February, Xai introduced Grok-3, the latest chatbot iteration, poised to compete with Chinese AI firms Deepseek and Microsoft-backed Openai. The X platform can facilitate the distribution of Xai products and provide real-time user feedback.

In 2022, Musk acquired X and subsequently Twitter for $44 billion, taking the platform private after its 2013 IPO and stating, “the birds will be released” post-acquisition.

Following the acquisition, Musk restructured the company, urged advertisers to leave the platform, resulting in a significant revenue decline. However, as Musk’s influence grew, the brand eventually returned to X.

Sources familiar with the transaction revealed that seven banks provided loans to Musk for the X acquisition, extending their loans to XK for the X deal, maintaining their book debt for two years, due to heightened interest in exposure to AI companies and improved X operational performance.

After the merger, investors who acquired debts from banks are expected to profit, according to Espen Robak, founder of Pluris Aluation Advisors. He stated, “Even if not fully repaid, the debt holds increased value.”

Additionally, a US judge rejected Musk’s attempt to dismiss a lawsuit alleging he misled former Twitter shareholders by delaying disclosure of his initial investment in the company.

Source: www.theguardian.com

Elon Musk confirms sale of X to his AI startup Xai

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Elon Musk announced on Friday that his social media company, X, sold its artificial intelligence startup, Xa, in a rare financial arrangement within the business empire of the world’s wealthiest man.

The total stock trading valued Xai at $80 billion and X at $30 billion. X’s price fell from the $44 billion it paid to social media companies in 2022, but it was still higher than the $12 billion valuation given by some X investors recently. Xai’s final valuation in the December funding round was about $40 billion.

The two companies are private and already share important resources such as engineers. Xai’s chatbot, Grok, is trained with data posted by X users and is available in X. A banker at X for X informed investors that a portion of the social media company’s revenue came from Xai.

In his post, Musk wrote, “The future of Xai and X are intertwined. Today, we have officially taken a step towards combining data, models, calculation, distribution, and talent. The total company will provide a smarter, more meaningful experience to billions of people, while still remaining true to our core mission of improving knowledge in search of truth.”

The deal highlights Musk’s ability to manipulate different parts of his business empire. He merged the company that had lost value, X, with the company that had gained value, Xai, in a strategic move. Musk previously executed a similar strategy in 2016 when he used Tesla’s stocks to acquire SolarCity.

While Tesla is publicly traded, most of Musk’s other companies, like SpaceX, The Boring Company, and Neuralink, are private and less transparent. Musk often reallocates resources and employees among his businesses, operating them as a single entity.

X’s CEO, Linda Jaccarino, expressed concerns about the future, indicating a downturn in fortunes. X and Xai operate in different orbits, with X being more widely known. Since Musk’s acquisition, X has struggled financially due to controversial decisions and a decline in advertiser confidence.

According to Fidelity, X’s valuation plummeted to $12 billion in December. Some advertisers have returned to X recently, hoping for Musk’s favor, but the company has not yet achieved financial stability.

Xai was founded by Musk in 2023 to compete with OpenAI. Musk’s strategic moves and financial decisions have had a significant impact on X’s performance and revenue generation.

Despite challenges, the company remains resilient and continues to work towards its revenue targets. X’s focus on innovation and growth reflects its commitment to delivering value in the tech industry.

Musk’s vision for Xai and X reflects a strategic alignment of data, technology, and talent. The convergence of these resources aims to revolutionize the user experience and enhance knowledge discovery.

With Musk at the helm, X and Xai are poised to unlock new potentials and drive growth in the tech ecosystem. The integration of their capabilities will redefine the boundaries of innovation and propel the companies to new heights.

As Musk continues to navigate the complexities of business and technology, his visionary leadership will shape the future trajectory of X and Xai. The synergy between these entities promises a transformative journey towards excellence and impact in the digital landscape.

News of the trading deal on Friday was met with enthusiasm within X. Jaccarino’s message to employees underscores the excitement and optimism surrounding the company’s future prospects.

As X and Xai embark on a new chapter of growth and innovation, the resilience and determination of the team will drive them towards success. Musk’s strategic vision and leadership will guide the companies towards a future filled with limitless possibilities and achievements.

Ryan Mac Reports of contributions.

Source: www.nytimes.com