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AI News Roundup: Elon Musk’s xAI Files as a Benefit Corp

Also – Anthropic on track to book $850 million in 2024 revenue, Apple exec to help OpenAI design hardware

Deborah Yao

December 29, 2023

3 Min Read
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Elon Musk’s xAI files as a benefit corporation

Tech billionaire Elon Musk’s AI startup, xAI, has filed to be a for-profit benefit corporation in Nevada, according to The Information. That means the startup prioritizes being a benefit to society over its fiduciary duties to investors.

The general purpose of xAI is to “create a material positive impact on society and the environment, taken as a whole,” according to the Nevada filing. 

The Nevada Secretary of State defines benefit corporations as  “for-profit entities that consider the society and environment in addition to fiduciary goals in their decision-making process, differing from traditional corporations in their purpose, accountability, and transparency.”

Anthropic, an xAI and OpenAI rival, filed as a public benefit corporation in Delaware, which requires that the startup produce a public benefit and operate in a responsible and sustainable manner in addition to serving the financial interests of its shareholders.

OpenAI was founded as a nonprofit in 2015 but four years later added a ‘capped profit’ arm to pursue for-profit endeavors to raise capital for their operations. As a nonprofit, “our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return,” OpenAI co-founders Greg Brockman and Ilya Sutskever wrote in a blog post. As such, “we can better focus on a positive human impact.”

When human-level AI (artificial general intelligence or AGI) arrives, “it’ll be important to have a leading research institution which can prioritize a good outcome for all over its own self-interest,” they wrote.

OpenAI’s nonprofit would control the development of AGI, which it defines as a “highly autonomous system that outperforms humans at most economically valuable work.” Importantly, AGI would be excluded from IP licenses and commercial terms with Microsoft, which reportedly invested $13 billion in OpenAI.

Microsoft accepted these extraordinary terms from OpenAI and “exemplify why we chose Microsoft as our compute and commercial partner.”

Anthropic sees $850 million in 2024 revenue

The Information is also reporting that Anthropic expects to end 2024 with at least $850 million in revenue, based on its run rate. That is up from $500 million it projected earlier.

Anthropic makes money by commercializing its Claude family of large language models, which also is available to customers of AWS and Google Cloud. Amazon and Google are investors in Anthropic.

Anthropic is in talks to raise $750 million that would value the startup by as much as $18 billion. The AI startup, founded by two OpenAI executives, expect to spend billions renting servers from AWS and Google to train and power its LLMs.

The startup made a point to emphasize AI safety when it was founded.

Apple exec to design OpenAI hardware

Apple design executive Tang Tan is leaving the company to join LoveFrom, the design firm started by Apple’s legendary designer Jony Ive.

Bloomberg is reporting that Tan will work with Ive and OpenAI CEO Sam Altman to design new hardware that has the latest AI capabilities. OpenAI will provide the software.

Ive famously designed the iPhone, iMac and iPad under Apple co-founder Steve Jobs.

The new trio are at the hiring stage and are creating concepts for the hardware, such as devices for the home. Tan, who is leaving his job as Apple’s vice president of iPhone and watch product design, will lead the hardware project.

Altman’s fundraising efforts for this project contributed to his firing by OpenAI’s board in mid-November because it was an external initiative. Altman was subsequently rehired; the board was reconstituted and would be expanded to nine.

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About the Author(s)

Deborah Yao

Editor

Deborah Yao runs the day-to-day operations of AI Business. She is a Stanford grad who has worked at Amazon, Wharton School and Associated Press.

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