Tesla CEO Elon Musk on Wednesday launched his new company xAI which will focus on research related to generative artificial intelligence. According to Musk, the goal of this new entity is to "understand reality." The development comes as several big technology companies have ramped up research related to generative AI.

“Announcing formation of @xAI to understand reality,” says Musk in a tweet.

According to the website of the newly formed entity, Musk has hired 11 researchers from Microsoft, Google, OpenAI, DeepMind and Tesla in order to carry out research. The team will be led by Musk. The newly formed entity is separate from Musk’s other companies. "We are a separate company from X Corp, but will work closely with X (Twitter), Tesla, and other companies to make progress towards our mission," says the website. 

Musk quoted Douglas Adams' infamous science fiction novel 'The Hitchhiker's Guide to the Galaxy,' as the reason for picking up July 12 to launch xAI. "And what are the most fundamental unknown questions? Once you know the right question to ask, the answer is often the easy part, as my hero, Douglas Adams, would say," his tweet says.

Sharing the screengrab of xAI's website, he notes that adding the date 7-12-23 equals 42. "42 is the answer to the ultimate question of life, the universe and everything," Musk says, postulating the science fiction book.

Musk has been already incorporating a lot of AI research on Tesla and SpaceX.

The group will be advised by Dan Hendrycks, who currently serves as the director of the Centre for AI Safety. In May this year, Hendrycks, along with a group of AI experts, journalists, and policymakers such as OpenAI's founder Sam Altman, warned that AI can pose a "risk of extinction" to humanity alongside other societal-scale risks such as pandemics and nuclear war.

According to a study by Mckinsey Research, generative AI applications such as ChatGPT and Midjourney could add $2.6 billion to $4.4 billion annually across the 63 use cases to the global economy. "Generative AI, such as applications like ChatGPT and Midjourney, have the potential to deliver substantial economic benefits to the global economy, valued as much as $2.6–$4.4 trillion annually. This technology is expected to have the biggest impact on the professional lives of those with higher education," says the study.

As per the study, as compared to earlier forms of AI and analytics, such as machine learning and deep learning, generative AI could increase productivity by up to 40%. McKinsey estimates that approximately 75% of the value that generative AI use cases could deliver comes from customer operations, marketing and sales, software engineering, and R&D.

"Across the high-tech industry, the technology could deliver value of up to $240–$460 billion annually, as technology speeds up and makes software development more efficient," says the study.

Over the past few months, big tech giants like Google, Microsoft and Accenture are doubling down on generative AI.

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