Future of the AI Race

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There's a link in the show notes of this episode That's all the Ts and C's Okay, on with the show Well Muskers has always been a bit of a doomer. in the sense that he thinks AI I'm at the end of humanity This is the FT's San Francisco Bureau chief, Stephen Morris, talking about Elon Musk a big science fiction fan, he always references Ian Banks's culture novels. kind of the utopian idea of the future of AI where machines create super abundance and the rest of the humans just live for partarties But he also likes to talk about Terminator, the flip side, Skynet, you know, deciding that the easiest way How long this existence is by removing humanity and he uses these kind of pop culture science fiction references a lot Musk has been warning about the dangers of AI for years But at the same time, despite those fears, he've been determined to be a central player in the creation of the technology He was an early investor in Demis Hasavis's deep mind and one of the original founders of Open AI But with Musk, there's always an inherent contradiction, you know. I was speaking with Sebastian Malaby who has written book about Demis Saris and I said I'veok to Elon Rot, you know, Demis If Musk is so worried about AI, like why is he right out there on the frontier trying to build one of the biggest, most dangerous models? And he said, Well, as far as I can tell, like Elon is both terrified of this technology but also terrified about not being in the vanguard of the next big thing cars, it was autonomy, it's space flight, rockets. AI is the next frontier and Musk just cannot bear to like not be there himself Elon Musk was quick to recognize the significance of AI But he always seemed to find a way of missing out By the time Chat GPT came along, Deepmine had long been sold to Google Sam Altman was the boss of open Eye A musk was out in the cold. But now he has his own AI lap. XAI partart of his giant SpaceX company, which Musk is hoping to take public in the largest IPO in history. AI is at the heart of SpaceX's future plans putting data centers into orbit. And in the words of the IPO document The emergence of new trillion dollar markets on the Mon, Mars, and beyond Can the world's richest man make up for lost time takeake AI into space put himself back at the vanguard of artificial intelligence This is Tectonic from the Financial Times. I'm Murad Ahmed, the FT's Technology News editor A handful of Silicon Valley companies are vying to lead the world in artificial intelligence. In this season, I'm talking to the FT's expert tech reporters about each of them In this episode XAI Basics Elon Musk Elon Musk and XAI, I spoke to Stephen Morris And to Hannah Murphy, who writes about technology for the FT in San Francisco You'll hear from her in a moment. but first I wanted Stehen to recap a bit of Musk's history with AI Starting with a famous debate he once had with Larry Page, a co founder of Google partarty back in twenty fifteen Yeah, it's his birthday I think it his forty fourth birthday party. His then wife, I think, Tulula Rileilly, the actress had organized it for him And he was having a debate, a late night debate around a fire pit with Larry Page, as you said, one of the co founders of Google Apparently Larry Page has some disorder of his throat or vocal cords, which means he has to whisper very quietly And everyone at the party was trying to listen into this increasingly frenetic debate about, you know the future of AI. And the way that Musk tells the story is that essentially Larry Page wanted to brring about the AI singularity and merge AI technology with humans to create not Androids. I forget what a human merge with a machine is called What's cybok Cyborgs, An Elon Musk didn't like the idea of this at all. He is all about the human, which is probably why he has so many children And he doesn't want them to be merged with AI and for humanity to essentially lose part of itself So they start arguing more and more And eventually, Larry Page, according to Elon Musk, calls him a specist. Wh means he's somebody that prioritizes this human over over the machine. And Elon Musk goes, Well, of course I do And after this, they were no longer on speaking terms And Elon Musk concluded from this exchange that Google was a dangerous company to have control of AI technology. and right from the beginning it looked like this was going to be the default position. and Google had more money than anyone to invest in it. It bought the leading lab deep mind, and that At least Nilus telling us why partart of the reason why he determined. to try and build all of these rival efforts, whether it's through Tesla, whether it's openAI, or whether it's now XAI because he just doesn't trust Google. And he's been repeatedly frustrated in his efforts to do things in AI. He was an early investor in deep mind and then it was sold to Google, which he tried to block. And he was a co founder of Oen AI, which he explicitly set up to compete with Google and maybe develop AI with more attention paid to the potential risks Obviously open air went on to be a big deal, so how come he wasn't part of that? He was a biggest donor who donated thirty eight million to them, in rent and chip payments. And he lent his name to the company, he helped them recruit. I mean he definitely had a leading very prominent role in the founding of this company. But when he decided that the only way to compete with Google was raw money and power the computing power that came with that, He wanted them to either merge with Tesla, his electric vehicle company, which of course, develops real world AI in its full self driving system and develops its own chips orr he wanted to be given a ninety percent stake in the for profit company, essentially sidelining the other founders like Samaltman and Greg Brockman and Ilias Tuskva and taking control for himself They wouldn't give him this. Part of the reason was that they didn't want to be cut out of the monetary upside, but also they didn't trust Elon. I mean, it's difficult to not know a lot about the man because of his preeminence in this current moment in capitalism But Elon is a difficult person to work with, I think it's fair to say And giving him ninety percent control of the company was essentially signing away their own destinies, their ability to control. And there were serious questions about whether Mus actually cared about AI safety He says he does, but does he actually care or did he care more about winning and beating Google? And what was he prepared to do in order to get there. So they had a big argument. when he couldn't get control They essentially refused to accede to any of his demands and he left the board, I think in early twenty eighteen And openlyI went on to launch ChatuPT and kickstart the I four years later. Yeah. It took a while. The AI revolution. And so how does Musk respond to the rise of ChatuPT Well, he's obviously very annoyed. He's a competitive person and you know, he wants to get back in the game however he can So he founds his own company, which he calls XAI, almost everything in the Musk world has an X in it. Hanner and I have written a number of stories kind of chronicling you know, the brutality of working for Elon Musk as he fights to catch up rivals in AI Yeah, let's talk about that. So Musk now has his own AI lab called XAI. It's got its own chat bot called Grock And he appears to want to directly compete with the likes of Google and open AI But the company seems to have a very different culture to other AI labs and there have been a few controversies and problems Hannah You've also covered Musk over the years. What's going on? I mean, it's hard for Stephen and I because how many times can you write the same story that there's been a reshuffle in the executive rankings that a huge number of people have left? I mean it's the same story every couple of months. You'll speak to AI staff at and XAI who willll tell you that they will learn that they are supposed to do a product release about a new product they haven't really heard much about on Twitter by Musk posting it on Twitter, not even inside the company being told or given a clear timeline. And I think labs like open AI and Deep mind have for years been slowly, steadily consistently building up processes a text stacks around rolling out these models that works. And you know, Elon himself has said he doesn't believe in research. the term researcher, he thinks that's a relic and you should all be engineers working on the product now. but it is that is at odds with some of the more sort of academic eents of Cutting edge frontier breakthroughs And then you also have the sort of organizational chaos and then you have Musk saying that itself has to embody his free speech ideals I asked Grock itself if it was behind in In fact I said why is Grock behind the other models? And it pushed back on this and said it wasn't meaningfully behind. Oh, really? But then it added trrades some in quotes safe Hist for maximum truth seeking, real time knowledge and less refusal So this is the idea that the model shouldn't be moralizing or paternalistic and it should be as close to totally free wheeling. I think there's an unhinged mode as it's called. But we've had a couple of crises too that spring to mind. One is last summer, it started kind of gloomming onto various conspiracy theories around white suupremacy and talking about Hitler a lot, when even when it wasn't sort of prompted directly and it even described itself as Grock Hitler wasasn't it Mechah Hitler? Mechah Hitler? Yes. Mechah Hitler then at the beginning of this year, you have a big worry around non consensual deep fake imagery. So the model making fakes of real people, but in various states of undress or sort of sexually graphic somehow, and that was typically targeting women and also children. So that caused a huge backlash. And in both of these instances, it was Musk who sort of propelled these crises forward by in the case of the non consensual imagery, Musk had tweeted a deep fake of himself in a bikini and's suddenly hundreds of other people try to do similar he'd also on the Mechca Hitler piece. bothoth cases' sort of S the man burring on this crisis, which then becomes a huge distraction and presumably internally having to deal with regulators, press, etcera knocking at your door So we should say that Elon Musker said subsequently that any use of Grock to create illegal content is well illegal and therefore people are going to have to be responsible for that and he doesn't condone that at all. But this issue that you bring up kind of has shown, you know, there are so many of these conflicting things about him. He wants to be a free speech absolutionist and be at the forefront of the AI race and push people incredibly hard, but also keep the talent with him Do you get the sense, you know, is there an audience for what Grock is becoming? Is there a way of turning this into a viable business I think for me, a signal was last week speaking to someone a source and we were talking about Meta and they noted that while Meta has been trying to catch up, it's still a little bit behind open AI, Gemini Anthropic, but it's made some traction recently. and they were saying Elon simply has not. It's rare to hear someone say that Mark is doing better than Elon and this tells me that you know Elon really is beginning to trail in this respect. I mean, there will always be Elon obsessed Twitter fans and users who will I'm sure use grop Sometimes I will use it for research because it is good at scouring Twitter itself for anything people have said but it's not in areas like coding like perhaps you know having particular edges in particular areas with Musk the Cser acquisition as a bit of an acknowledgement that it is behind in a certain area. And I don't think we have a very clear sense of exactly what is the consumer and or enterprise target here Stephen very briefly, what' the Cursor acquisition for those uninitiated? So Cursor was an AI startup that specialized in coding, which is the most persuasive, most lucrative business case for AI so far Musk always said that the Grock was going to be hyper focused on coding it was going to catch up and then lead the frontier This hasn't happened. So he's turned to curser. firstirst he hired a couple of their senior staff. Turbocharge his own efforts He then dispensed with, I think, all seven of his co foundounders at XAI growing frustrated with their performance or then grow frustrated with his demands He's then got an option buy this startup cursor for sixty billion, which is a huge increase in its valuation And as Hannah said, you don't buy a rival coding business for sixty billion if you think your internal efforts are going well, do you? So Musk is facing a lot of challenges with his AI business. We've had controversies with Grock And he's struggling to compete, particularly when it comes to the business cases for generative AI like coding. There's one massive event that we're expecting this year that could change everything Because XAI is now part of Musk's other company, SpaceX SpaceX is going public this year in what's expected to be the biggest IPO in history So after the break, we'll talk about what that might mean for his AI ambition Every day people ask AI questions about your category, Which brand is best? Who to trust? what to buy AI gives an answer But do you know what it's saying about you Gist GEO shows you exactly what questions are being asked, which brands show up in each answer And why? along with a specific plan to improve your visibility? prioritized by what will actually move the needle. No guesswork Real queries, real data, all with gist. Learn more at gist. ai. Right now, someone is asking AI a question about your industry They're looking for the perfect recommendation or an accurate solution, and they're ready to act on it. When AI gives an answer, is your brand a part of it or not Most companies have no idea which. J changes that. We show you where you're visible, where you're not, and give you the tools to do something about it Time to make AI work for your brand with Gist. Learn more at gist. ai So look, must the man of many contradictions here, we have told a story largely of woe That he has constantly had the vision to know that AI was going to be a really fundamental important technology. T to get in on it. Maybe some personal failings have led to him not being able to really kick on. And yet he's the world's richest man who's on the verge of his greatest ever payday BaseX IPO, which looks like it's going to be massive. And XAI is part of SpaceX now I to explain all of that, Stephven. You wrote a great piece looking at what the SpaceX IPO means Talk us through how massive it's going to be and what Musk is trying to get out you know, three companies in one, X, the social media network, X, the AI, model developer XAI, and then of course, SpaceX, which is part rocket launch business, part satellite broadband business The cynical argument is that X was losing money. It didn't have much traction And bankers and investors and experts you're facing quite steep losses on the money that they put in to help Musk buy it And then XAI is burning, as they say in the industry, cash burn, spending more money than they generate in revenue. Tens of billions a year. So what do you do? You know, people are looking at XA and thinking, is it going to be able to raise money? L does it have a viable product? What is Grock? whoo is it for So then you merge it with SpaceX and you say, actually, this has been the plan all along. We're going to build data centers, orbital data centers in space. That's how we're going to beat Google becausecause they can't do this, because we're the only ones that We already have a network of ten thousand starlink satellites up there, all connected by lasers. We're building an even bigger rocket, which can send even bigger starlink satellites up this interconnected cluster of Telco technology will eventually be turned into giant floating data centers that don't need to be cooled down because obviously space is very cold, don't need to pay for energy because there the sun is so much stronger outside of the atmosphere. So that's kind of like s the optimistic ball case. you know, if you're looking at the beare case You know, he hasn't actually got the Starship rocket to work yet without either failing or exploding. Nobody quite knows how to make a data center. One of the biggest problems is keeping all of these chips. in a big cluster functional. If you have to send up an astronaut or a robot up there to fix it in space, that seems to me to be slightly more difficult than sending somebody in a hard hat into a data center And you know, his competitors for once have far deeper pockets Musk is severely outgunned on multiple fronts And whilst we haven't even had the SpaceX IPO, which is set to raise somewhere between fifty doll and ninety billion dollars at a valuation of one point seven five trillion doars, people are already talking about the eventual merger of Tesla, which is a one point four trillion dollars company with SpaceX which would then put together an entity which if you believe the valuation would very nicely into the top five companies in the world. What we're describing here with Elon Musk is somebody who's Finn. He wants to run a space exploration company a electric car company, a humanoe robot company. He wants to build a free speech social media group that dominates all others And he also wants to conquer AI Hannah, you' Wed must try and run multiple companies at once. How good is he at juggling all these balls all at the same time feel like compare him as I tend to these days to Mark Zuckerberg. The Mark Zuckerberg trope is that when he fixates on something like the eye of Sauron and you will have an obsession at one obsession at a time And at the moment for Mark Zuckerberg, it is AI. And I think it is actually fairly similar with Musk From where I sit, I think X is getting much less airtime there was a U. or two around the takeover where he was obsessed with it and then there was this sort of the Trump campaigning where he was very, very active and The company itself was getting a lot of attention and resources and now it feels like that' sort of falling by the wayside and it feels like he's definitely moved into a more expansive extraterrestrial as Stephven says moment where he's trying to elevate his pitch beyond just a consumer or enterprise AI. Stepehven, what do you think is Musk's ultimate goal when it comes to AI What does he ultimately want to achieve He's trying to build everyone's trying to build AGI, which is this vaguely defined concept of artificial general intelligence, which is loosely understood as when a machine can perform Almost every task better than a human But right at the core of his belief someomewhat at the core of these other sort of AI philosopher kings like Dario Amadee at Anthropic and Demis Sassaris at Deepmind, they all kind of think that they are the only people that can be trusted with AGI. They're the only ones that fully understand how the technology comes together and can make sure that it's controlled on the downside And a lot of people that work for Mk in particular don't necessarily agree that he should be the guy with his finger on the button P peopleople that Hannah and I have spoken to from incidents like Mechca Hitler to the indecent images of children, Musk is willing to push the boundaries in order to try and make a splash and catch up with his rivals It would be really is going to be a fascinating you know, I would say the next one to five years. I mean, most of these AI labs say that AGI will be reached somewhere between the next twelve to thirty six months But in terms of like the next frontier of data centers and space I flip on a weekly basis between whether I think this is all Marketing, science fiction nonsense or whether Musk who has often achieved the seemingly impossible in the past can pull this off again And once he executes this IPO, he's certainly not going to lack the funds in the same way that he has over the last few years So it's going to be Very busy period, I think, for the financial Times tech team but also a very interesting one Hannah as we try and assess where Musk is and where he might end up going Clear, whatever we think about his political views, he's an extraordinary entrepreneur and he'll be a very important figure in the world of business and technology and will be remembered as such, but do you think he'll be remembered as a titan of AI into the future think that we cannot say because It seems like someone's out ahead and it seemed like, for example, just til recently, Google was way behind and then suddenly they sped up and then suddenly everyone was talking about anthropic Op AI who nobody thought anyone could useer and who with a clearfront runder sort of trailing behind and reorgig I think it's everm thing. and there's sort of many different visions and maybe many different visions can win. and Musk will perhaps have an edge on that more sci fi vision that Stephven outlined Stephven, I'll give you the final word. Can he do it Yeah, canan you win the AI race I don't necessarily know it's one of these lo. I know tech has trended towards monopoly or oligopholy in recent years, certainly I think there's room for more than one winner And I'm loath to put my voice on a podcast saying that he will be one of the losers as opposed to one of the winners. I think his failure to gain any traction years of effort does suggest to me that he may lose very important partarts of the AI race to rivals I think he's in a much stronger position on like robotics and autonomy. and of course, if the future of data centers is these vast orbital things up in the outer atmosphere, then he's definitely in the strongest position For that I don't know what Grock is. like you hear stories about what people use it for. There was a big spat between anthropic and the Pentagon, which was because of concerns about mass domestic surveillance. and autonomous lethal weapons the contract that Anthropic refused to, Musk just signed that immediately trying to get some more revenue for Croc But somebody in the government told us that the only thing they use it for is