Elon Musk’s xAI is a “failure” that cannot compete on the artificial intelligence front, AMI Labs founder Yann LeCun told CNBC, giving his view on what could cause a “big bubble burst” in the industry.
Mr. LeCun’s comments reignited a long-standing feud with Mr. Musk and called into question the valuations of some of the world’s largest AI companies.
Former Lucan Meta”He is the chief AI scientist at tesla CEO “conspiracy theories” on social media. Musk accused LeCun of having been “out of touch with AI for a long time.”
LeCun is often referred to as the “godfather of AI” for his early work in this field.
“Quite frankly, xAI is kind of a failure because the founding team left,” LeCun said.
“Elon is in a very difficult position right now to hire top talent in AI because he, as you know, didn’t have a very good attitude towards his previous team.”
Last year, several of xAI’s co-founders left the organization. Musk merged in February space x Signed a major deal with xAI that valued the company at $1.25 trillion.
For the three months ended March 31, SpaceX’s AI division, which includes xAI, posted an operating loss of $2.5 billion. Meanwhile, AMI Labs, aiming to become a global model, raised $1 billion in a funding round in March, giving it a pre-funding valuation of $3.5 billion.
Elon Musk and Yann LeCun.
David Swanson | Gonzalo Fuentes | Reuters
LeCun said xAI has a “huge infrastructure” that it rents out to other companies because “that’s the only way he (Musk) can recover his costs.”
LeCun’s comments on infrastructure refer to xAI’s Colossus 1 and Colossus 2 data centers in Memphis. Both Google and Anthropic rent computing power at xAI’s data centers.
“I’m not very positive about xAI’s prospects,” LeCun said, adding that he doesn’t expect xAI to be able to compete with the big players OpenAI and Anthropic.
CNBC contacted SpaceX and xAI and did not receive comment.
“Bubble explosion”
Companies’ spending on AI has come under scrutiny in recent months as the technology has turned out to be more expensive than expected. OpenAI CEO Sam Altman reportedly said on an internal livestream this month that companies are currently discussing how much they are spending on AI. Altman said the cost of AI is a “huge issue.”
“The prices of these AI services are going up, their operating costs are going down, but not fast enough. So all these companies are losing money, and basically the money that most people use is coming from investors. This can’t last long, right?” LeCun said.
The AMI Labs founder added that labs like OpenAI and Anthropic “will either have to raise prices or cut costs, or there will be a massive bubble explosion.”
LeCun has been a vocal critic of the limitations of large-scale language models (LLMs), the foundation of the current generation of major AI products. Instead, LeCun is a proponent of the “world model.”
LLM is very suitable for reasoning and coding because it learns language patterns and predicts what will happen next. World models take a different approach with the aim of understanding how the real or simulated world works. This includes objects, causes and effects, and actions.
“Personally, I don’t think we’ll have a generalized reliable agent system until it’s based on a world model,” LeCun said.
AI companies from Anthropic to OpenAI are focusing on AI agents, systems that can autonomously perform more complex tasks.
LeCun said the LLM is useful in areas such as coding and mathematics. But he pointed out that “the cost of running a system with this kind of performance is very high compared to what users are prepared to pay.”
