Inside Elon Musk’s AI party in OpenAI’s old headquarters

It had all the makings of a typical recruiting event for a tech startup in San Francisco. There was free food, drinks, and live music generated via code being written in real time.

But there were also mandatory metal detector screenings, ID checks, and security guards everywhere. It was held by Elon Musk at the original Mission District headquarters of OpenAI, which Musk cofounded before leaving after (reportedly) failing to take it over. And Musk was there to convince people to join his latest startup, xAI. 

The timing felt intentional. That same day, OpenAI was hosting its annual Dev Day across town, where CEO Sam Altman had spoken hours earlier to a packed auditorium of developers. The Silicon Valley rumor mill was buzzing about OpenAI closing in on the largest round of funding ever for a startup, surpassing the amount Musk himself had just raised for xAI four months earlier. 

Around 8:30PM, the AI-generated music cut off, and Musk, surrounded by bodyguards, climbed onto a table in a sectioned-off area to address the room of engineers. He began talking about why he started xAI and moved it to the same office where he helped launch OpenAI nearly a decade ago.

“We want to create digital superintelligence that is as benign as possible,” Musk said at the Tuesday gathering, according to a partial recording of his remarks shared with The Verge. He then called on those in the crowd “to join xAI and help build the intelligence and build useful applications to derive from that intelligence.”

For about an hour and a half, Musk took questions from the (predominantly male) audience, according to people in attendance. He said he believes we’ll reach artificial general intelligence (AGI) in a couple of years; he hopes to build a “supersonic jet company” next; he plans to open-source xAI’s models roughly nine months after they’re released; and most importantly, he wants to move fast. He compared xAI’s growth to the SR-71 Blackbird, an airplane that flew three times the speed of sound and provided the US with enemy information during the Cold War.

“No SR-71 Blackbird was ever shot down, and it only had one strategy: to accelerate,” Musk told the room per a post on X from an attendee. 

He predicted that OpenAI, Anthropic, Google, and xAI will be the main players in the AI race for the next five years. The goal of the party was to find engineers for xAI’s API, one attendee said. Ultimately, he said he aspires for xAI to be as dominant in AI as SpaceX is in rockets. 

At 10PM, the fire marshal put an end to the recruiting event. Musk was briskly escorted out a backdoor with his security detail. Attendees, including some wearing OpenAI backpacks, walked out into the night with pizza slices.

xAI began in March 2023 on the 10th office floor of X, Musk’s social media platform formerly known as Twitter.

He assembled a team drawn from his other companies, including Tesla and SpaceX, as well as his 17-year-old son, his cousins, and the son of Jared Birchall, who runs his family office, The Verge has learned. The mission: surpass OpenAI and deliver a competitive large language model in just three months.

Since then, xAI has expanded from a single floor at X to a larger office in the Stanford Research Park in Palo Alto. Musk tapped Igor Babuschkin, a former Google DeepMind researcher, to lead xAI. He also recruited researchers from OpenAI, Microsoft, and Meta. 

In May, xAI secured $6 billion in funding from several high-profile investors, including Andreessen Horowitz, Lightspeed Venture Partners, and Sequoia Capital, valuing the company at $24 billion. Investors in X own 25 percent of xAI, which benefits from the wealth of training data the social media platform produces every day.

Under pressure from Musk, xAI’s first model was launched in late 2023 via Grok, a chatbot for paid subscribers to X. It has since released three updates: Grok-1.5, Grok-2, and Grok-2 Mini. But unlike competitors who had the luxury of time to develop their own systems, xAI’s lean team had to move fast and find a quick solution. One person familiar with the development of the first model described it as a patchwork product that relied on Microsoft’s Bing for search and Meta’s open-source Llama model for query rewriting. 

Musk is still relying on outside technology for core Grok features. Just over a month ago, xAI announced a deal with Black Forest Labs to power image generation. The feature lacked guardrails put in place by other image generators, allowing people to generate photos of anything from Taylor Swift in lingerie to Kamala Harris with a gun. Musk said on X that xAI was working on its own generator but that the Black Forest partnership let it launch one in Grok more quickly.

A person familiar with what xAI is working on tells The Verge that voice and search features are in the works. The idea is that, like OpenAI and Meta’s voice modes, Grok will be able to talk back. Musk also wants it to provide summaries of news stories shared on X and trending topics.

Musk is now grappling with fierce competition in the AI race for top engineering talent and GPUs. As the richest person in the world, money isn’t an issue for him, though — despite the financial pressure that X’s plummeting value has created. While he’s raised billions of dollars for xAI, Musk doesn’t exactly need to create a profitable AI company any time soon — for him, taking down his runaway rival OpenAI seems to be satisfying enough.

Musk cofounded OpenAI with its CEO Sam Altman and a group of partners in 2015, but Musk quit the board only three years later. At the time, he cited “potential future conflict” due to Tesla’s focus on AI. Later, he claimed he quit due to disagreements with the OpenAI team. And in March, he sued the company, alleging (fairly dubiously) that it broke a contract with him and abandoned its mission. In response, OpenAI shared emails between its leadership and Musk that revealed a power struggle where Musk planned to take sole control over the company.

“I just don’t trust OpenAI for obvious reasons,” Musk said during the recruiting party. “It is closed, for-maximum-profit AI.”

The falling out between Musk and OpenAI has evolved into a stiff game of one-upmanship. This week, OpenAI raised $6.6 billion at a $157 billion valuation, just outpacing Musk’s historic funding round. Musk leveraged Tesla GPUs to build a data center nicknamed “Colossus” and reportedly brought online 100,000 advanced Nvidia chips last week. Meanwhile, Altman is on a global mission, meeting with UAE leaders, Asian chipmakers, and US officials to raise $7 trillion for 36 semiconductor plants and data centers, all aimed at advancing OpenAI’s pursuit of AGI. After Altman’s latest funding round, he reportedly asked backers to not invest in competitors like xAI.

Perhaps just as tough as nailing down funding or compute power is securing the top AI talent in Silicon Valley. The best researchers can easily earn millions, and the timing has never been better for them to launch their own startups. Many are driven by their own altruistic visions for AI’s future, making their choice of company often based on its mission and leadership. While Musk’s fame and bold visions give him an edge, it doesn’t mean the battle for talent is any easier.

So, Musk gathered a few hundred young engineers from rivals OpenAI and DeepMind — some fresh from attending his competitors’ developer conference that very day — to do what he does best: sell his vision of the future.

In Musk’s world, AGI isn’t controlled by companies like OpenAI or Google, who keep their best models private. Instead, it’s owned by him and shared with the world.

One potential draw for working at xAI, compared to a larger competitor like OpenAI, might be the opportunity to move faster and take bolder risks. With a small team and shorter product timelines, xAI offers a chance to innovate quickly, unlike larger, more cautious companies like OpenAI and Google. It may attract those eager to see rapid AI proliferation or who align with Musk’s techno-libertarian leanings — people who reject Silicon Valley’s “wokeness” in favor of a “super hardcore” work environment that prioritizes ambition and agility over corporate safeguards.

“My personal belief is that the best way to achieve AI safety is to have a maximum, truth-seeking AI,” Musk said at the recruiting party. 

Like a lot of things at Musk companies, the event came together rapidly. “He said that he had the idea for this event last Wednesday and that the office was unfurnished then,” said one source who attended the party. But the source called it an “overall chill event” focused on answering questions about not just AI but also Musk’s many other enterprises. “Elon’s committed to winning and accelerating xAI,” another source said.