Elon Musk’s artificial intelligence venture, xAI, has received a vote of confidence from New Street Research analyst and Tesla Inc. bull Pierre Ferragu.
What Happened: On Thursday, Ferragu took to X, formerly Twitter, and expressed his optimism about xAI, which was launched in July last year. In his post, the analyst highlighted several factors that he believes give xAI a competitive edge over its peers, including a significant cost advantage and the leadership of Musk.
“I am quite bullish on xAI,” he said, adding, “80% discount over OpenAI. I understand Grok has accumulated less experience and has less means, but still very early days, does that really matter?”
“Elon is a massive advantage – freeing the organisation from nonsensical innovation-killing groupthink and enabling fast innovation cycles,” he added.
Ferragu also spoke about the potential of xAI as a distribution asset and praised its ability to generate independent and thoughtful arguments. He concluded by encouraging his followers to conduct their own research.
“For what it's worth, I use Gen AI mostly to discuss uncommon philosophical theses, and at that game, Grok is excellent, probably the best at articulating sensible, well researched and well thought through, but very uncommon arguments.”
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Why It Matters: Musk’s xAI has been the subject of controversy in the past. In December 2023, the AI chatbot was accused of plagiarizing ChatGPT-parent OpenAI’s codebase. This led to speculation about the ethical implications of AI development.
Last month, Musk decided to open-source the code of xAI’s chatbot Grok. Deepwater Asset Management‘s managing partner Doug Clinton previously said that the tech mogul’s decision wasn’t surprising because of the “lawsuit between Musk and OpenAI" and the “second point, I actually think this is sort of a pattern of behavior for Musk and his companies.”
Meanwhile, OpenAI has been making significant strides in AI development. Earlier this week, the company announced major upgrades to its GPT-4 Turbo model, further intensifying the competition in the AI sector.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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