xAI isn't going anywhere...
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Today on the podcast, I wanted to do a big update on XAI, some things happening over at X, as I think this is a pretty significant amount of money that has just been put into the ecosystem. And that is the fact that XAI has just raised $10 billion. Now, I know these companies are spending so much money, sometimes it's like hard to keep track.

But $10 billion, I mean, this is literally the amount of money that Microsoft spent on OpenAI to essentially acquire 50% of the company, which kicked off like the whole AI frenzy. It was like the eye-watering amount. Now it happens and people are like, oh yeah, there's just another AI company raising a lot of money.

They did this in both debt and equity. And I want to talk about some things that I think you're going to use it for. Some interesting updates they've been rolling out and some interesting hires that they've made. We know that the AI space is going crazy right now. The competition's insane. We have Mark Zuckerberg, who's doing these allegedly $100 million offers. He's pulled four major researchers over from OpenAI to his new super intelligence team. They've acquired the entire company scale. So money is...

going crazy for the top players and it would appear that xai doesn't want to get left behind and they're just raising their way to the top in order to keep up with everybody else um to

traditionally grok 3 their their most recent model they put out is in the benchmarks pretty decent i would say it is top tier it's above some of the other big players it's above deep seek it's a it's above a number of others but google recently with their 2.5 pro i think jumped them a little bit and open ai i think has a bit of a jump up on with their most or with their latest model so maybe they're duking it out with anthropic uh some i don't know just according to the benchmarks don't don't hate me guys for these numbers just what i look was looking at this morning so

Apparently, though, in this whole deal, they did this with Morgan Stanley, who kind of ran it. And this is what they said. They said, the combination of debt and equity reduces the overall cost of capital and substantially expands pools of capital available to XAI. The proceeds will support XAI's continued development of cutting edge AI solutions, including one of the world's largest data centers and its flagship,

grok platform so that's what morgan stanley was saying i think this is just interesting because it tells you where the money is going to go right like it's not just for grok which is a great tool we know that they've like xai just acquired x so it has this massive data set living breathing people making posts it's just purchased essentially acquired an entire search engine which is interesting um that you know when elon musk was acquiring that not really knowing how valuable that data set in particular would be in the ai era um

But their most recent round that they raised before this was $6 billion. And that was, I think, more or less just equity for that. They had Andreessen Horwicks, BlackRock, Fidelity, Lightspeed, MJX, Morgan Stanley, a whole bunch of other, NVIDIA, AMD, Kingdom of Saudi Arabia, Sequoia Capital. All the big players were putting in on that. I mean, when you raise $6 billion, you need a lot of players. So everyone was putting in on that one. This most recent, $5 billion debt and then $5 billion in equity.

is a lot of money. And I think it's interesting because everyone that raised at that $6 billion is now essentially insulated, right? Their valuation went up a lot. So this is the total capital raised by XAI at this point is now $17 billion. So

A lot of money. XAI is not going anywhere. They have one of the world's largest data centers that they're building out. And so they're doing some very serious things which really help to keep them competitive. Okay, what are they doing with all that money? I want to talk about a couple interesting updates that I thought came. I think a lot of this, like Mark Zuckerberg, is hiring top talent for their platforms,

and doing, implementing AI into a lot. So I think a lot of this is kind of like XAI and X, now that they're essentially have been acquired, it's a merger of the two companies. They are the same thing. It's just a lot easier, I guess, to raise money for XAI versus a social media app. It's like, oh, this is old. Everyone's known Twitter for ages. That's not the sexy thing. AI is the sexy thing. We're building all this infrastructure. They're doing a lot of cool stuff. So that was, they were able to raise a lot of money. Something I wanted to talk about that I thought was really interesting that X is doing right now is they are piloting a new program that's letting them use

essentially Grok, their AI model, to generate community notes. So community notes essentially replaced something that Meta has now phased out, which is fact checkers. This was a very politically controversial job that kind of sprung out of the COVID era in an effort to combat fake news and all sorts of other stuff. COVID was kind of like a crazy time, I think, from

All sides, everyone politically everywhere. There was a lot of stuff going on. It was hard for people to know what was real or not. A lot of people said this was censorship or infringement or some people said this was necessary to quell misinformation. Whatever, I'm not really arguing what the purpose of. The point is,

It was expensive, but I don't think that was the big, I think it was deeply unpopular and Mark Zuckerberg got rid of it. And he essentially started implementing what Twitter or Elon Musk did with community notes, which is essentially the way that community notes works, by the way, and the difference between a fact checker. Number one, it's crowdsourced. So it's way cheaper because people are just kind of volunteering sort of like Reddit with Reddit moderators.

But the way that it's different than Reddit moderators and why people like it and why Mark Zuckerberg and I think TikTok and some other players are trying to like steal it, TikTok, YouTube, and Meta all kind of want this community notes feature. Essentially, a community note, so it's like a fact check that somebody writes, it becomes public only when it has achieved consensus between groups of accounts that have historically disagreed on past ratings. So,

You know, these fact checks could be some politician could say,

you know, this is the best bill for X, Y, and Z reasons. It's going to be amazing. And someone could fact check and say, actually, it's counterintuitive because of this X, Y, Z reason. If a whole bunch of people that historically disagreed, so like, let's just say politically, a whole bunch of Republicans and a whole bunch of Democrats agree that this fact check is actually true, regardless of what it says about your party or whatever. Like this isn't a team. It's just people trying to get like a verifiable fact out. If a whole bunch of people agree that typically disagree on stuff, it will go public.

I like this approach because I think it saves the program and kind of what Meta struggled with from whatever, from the controversy of being pegged as, oh, it's a super political. I think Meta got like, you know, people said, oh, it's mostly like left-leaning things. And then it kind of discredited all fact checkers. And I think a lot of people that weren't left-leaning didn't listen to them at all and whatever. So it just became this political thing. This eliminates that because it's come from both sides. Now,

This whole system is about to get rewritten by AI. It's a whole job function. It's a whole thing, which I think is very interesting. And it goes along the trend that I think we're seeing with social media platforms like Mark Zuckerberg, but also what Elon Musk has been saying essentially about using Grok to do more and more on that platform. And I think it's kind of a demonstration of, look, we can use Grok to do our community notes. He's mentioned that they want to use Grok to run their whole algorithm. So like picking what posts you see

They're going to ask, like, they're going to use, like, Grok to help pick what post. And it's also, like, kind of funny because it's, like, at what point is this AI Grok, it's a brand name, versus, like, just an algorithm? Like, we just know that, like, Instagram's algorithm is great at showing us stuff we like. TikTok's algorithm is great at making us addicted to videos. Like, what if TikTok had, like, a branded LLM and they were, like, we're using, like, TikTok LLM to, like, pick your videos and then, I don't know, it's, like, marketing, you

It's pretty much feels like it's just like branding marketing for their LLM. But it's interesting if it's truly an LLM picking it versus just a straight up algorithm, because it gives you a little bit more transparency. Algorithms are a black box. That's hard for you to know why you got recommended something. Whereas in LLM, it feels a little bit more like show this person posts about all these topics because they're interested in them. Not these topics because they're not interested in them. These are the muted words. These are the things I've clicked on in the past. Like it feels a little bit more auditable. And so that is something that I think is very interesting. Okay.

All of this to say, I think this is a trend we're going to see more and more. Whether this is hype or branding or whatever, I think this trend is going to be persistent in that we're going to see companies more and more using like, they're going to be like, we use ChatGPT to do X, Y, Z. That might've just been an algorithm in the past. It's like this branding in there. It feels more, or at least they're going to say, we use AI to do X, Y, and Z. When in the past, they were just like, it's just data science. It's just big data. It's just like,

AI is kind of the replacement for a lot of this stuff. So I do think that's interesting. Okay. One other thing that I just had to bring up because I thought this was really interesting was that XAI has just, or X, I guess, has just hired the entrepreneur Nikita Biyer as their head of product. So we're seeing similar to like what Mark Zuckerberg is doing with all these big moves. Elon Musk is also going and hiring, yeah,

trying to get big star players to work on his products inside of his companies. You could say that this person is working for X, but they're working for XAI because it's owned by it. But Nikita Bear, for those who do not know, is a little bit of a legend because he's an entrepreneur in the tech space.

So he is the most recently he was the head of, or he was the, uh, co-founder of gas app, which was acquired by discord. And before that he was the founder of the TBH app, which was acquired by Facebook. The reason why he's so legendary is because, or such a legend in the industry is because both of those apps are the exact same thing. He essentially built an app for like high schoolers to tell them who their crush was. I think that's like basically the just of it. Um,

I think they spun it a little bit different when they did the gas app where it was like, you know, like anonymously say nice things about all the people around you. And then if those people join and they do a bunch of like, say like a bunch of things about the people around them, they can see what people have said about them, whatever. So I think in the past it was like, well, find out who likes you. And now it was more like find out nice things that people around you have said anonymously. And then you find out like what, whatever. So yeah,

The interesting thing about this though, is if you go to their Twitter pages, the TBH app, which was okay. And the other interesting thing about both of these companies that he started, which were essentially the same company acquired and then immediately shut down the company, uh, Facebook and discord both acquired and then shut down the companies, which I thought was kind of funny. Um,

Facebook, though, he went and I believe he had to work at Facebook or at least had to not do anything else and vested for about four years till he got his Facebook shares. Then he went and literally rebooted the entire company. If you go over to Twitter, it's kind of funny, too. If you go to the TBH apps like page, which is still like live, even though the company shut down in twenty eighteen.

Their slogan was, see who likes you. And if you go to the gas app, their slogan, which was acquired by Discord in 2023, and then I believe was promptly shut down. But if you go look at the slogan of the gas app, it also is, see who likes you. So he literally used the exact slogan. So he's notorious because he started the same company and sold it to two of the top major tech companies. So I just thought that was pretty funny. So one...

One thing that he's famous for, though, is posting on Twitter a lot. He's very big in the...

in the tech world. He wrote a post back in April of 2025, or sorry, April of 2022 and said, Elon Musk hired me to run Twitter as VP of product. I've been building social apps for 11 years and not in a way that leads products to decay like a typical big tech product director. Dad, Twitter has a potential to be the leading messenger group app and content creation tool. Okay, so he said this back in 2022 and he replied to himself after this news where he said, never give up.

And that is essentially because he came out with a post that says, I've officially posted my way to the top. I'm joining X's head of product. He talks about why he loves the platform and yada, yada, and it's a picture of him and Elon Musk. So I do think that that is pretty funny. But all in all, I just say all this to say, XAI is raising a ton of money. They're employing a lot of the same strategies. And I'm really curious to see a couple big things from them. Number one, what happens with X?

with X because it's a massive data set. So I think that's a big asset. They also have the asset of building the world's largest data center, which is, we're not seeing a lot of other players try to pull that off. OpenAI and whatnot are doing infrastructure deals, but it seems like XAI is much further along in this.

And there's controversy around that, but they are definitely much further along in this. And then just the sheer amount of money, I think $17 billion, you cannot discount XAI. And they have to kind of raise that money because they're going up against Mark Zuckerberg, who has that at his disposal, $10 billion at his disposal every year that he can spend on AI. You have Google, similar position. You have Apple, who has kind of fallen behind, but could if they wanted to. You have OpenAI, Ananthropic. So

There's a deep seek and stuff. So there's a lot of big players in this. But overall, XAIX doing a lot of very interesting things and plugging AI in. I'll be curious to see how this rolls out. Now, if you want to try Grok, if you don't have a subscription to it, the number one way I recommend people do it is go check out AIbox.ai. That's my own startup. And essentially for $20 a month, you have access to all of the top models. So you have Grok, you have OpenAI, you have Anthropic, you have Gemini.

from Google and tons, you know, I think it's like 40 models, image, you know, audio, if you want 11 labs, tons of interesting image models that I think are better than what OpenAI has. So if you want to test out all of that for 20 bucks a month, it's AIbox.ai. You can also test out the latest from Grok. Go check it out. There's a link in the description. Thanks so much for tuning into the podcast. If you wouldn't mind leaving a rating or a review.

review on the show. It would help me to, you know, get found by a lot more incredible people like yourself with everything happening in AI. Thanks so much for tuning in and I will catch you next time.