Elon Musk’s XAI is a “failure” that will not be able to compete on the frontier of artificial intelligence, Yann LeCun, the founder of AMI Labs, told CNBC, as he laid out his opinion about what could cause a “big bubble burst” in the industry.
LeCun’s comments reignited the feud with Musk and cast doubt on the world’s biggest AI companies’ experiments.
LeCun, who had been there Meta’A senior AI scientist, he has clashed with Musk over the past few years on topics ranging from AI to what he describes as Tesla CEO’s “conspiracy theories” on social media. Musk, for his part, accused LeCun of being “out of touch with AI for a long time.”
LeCun is often called “the god of AI” because of his early work in the field.
“XAI is kind of a failure, frankly, because the founding team is gone,” LeCun said.
“Elon is now in a very difficult position for him to hire top people in AI, because he’s kind, you know, he didn’t behave very well in the … previous team.”
Over the past year, several xAI founders have left the organization. In February, Musk was incorporated SpaceX by xAI with a large company value of 1.25 trillion.
In the three months ended March 31, SpaceX’s AI division, which includes xAI, posted an operating loss of $2.5 billion. Meanwhile, AMI Labs raised $1 billion in a funding round in March in pursuit of global models, reaching its previous funding of $3.5 billion.
Elon Musk and Yann LeCun.
David Swanson | Gonzalo Fuentes Reuters
LeCun said that xAI has “huge infrastructure” that it leases to other companies, “because that’s the only way [Musk] it can recover costs.”
LeCun’s comments on infrastructure referred to xAI’s Colossus 1 and Colossus 2 data centers in Memphis, Tennessee. Both Google and Anthropic lease computing capacity in xAI data centers.
“I’m not pessimistic about xAI,” LeCun said, adding that he doesn’t expect xAI to be able to compete with heavyweights OpenAI and Anthropic.
SpaceX and xAI were not immediately available for comment when contacted by CNBC.
‘The bursting of the big bubble’
Business use of AI has come under scrutiny in recent months as the technology turns out to be more expensive than expected. OpenAI CEO Sam Altman reportedly said this month in a company livestream that companies are now discussing how much they’re spending on AI. Altman said the cost of AI is “a big problem.”
“Prices are going up for those AI services, but the cost of running them is going down, but not nearly fast enough. And so all those companies are losing money, and basically, mass consumption is funded by investors. That can’t go on for a very long time? ” LeCun said.
The founder of AMI Labs added that labs like OpenAI and Anthropic “will have to raise prices, they will have to lower costs, or there will be a big bubble burst.”
LeCun has been critical of the limitations of large-scale linguistic models, or LLMs, the basis of the current generation of leading AI products. Instead, LeCun is a proponent of “global models.”
LLMs learn language patterns to predict what’s coming next, making them well-suited for reasoning and coding. World models take a different approach by looking to build an understanding of how the real or simulated world works. This includes objects, cause and effect and actions.
“I personally don’t think we’ll have credible general plans until they’re based on global models,” LeCun said.
Artificial intelligence companies from Anthropic to OpenAI are focusing on AI agents which are systems that can perform complex tasks autonomously.
LeCun said LLMs are useful in areas such as coding or math. But he noted that “the cost of using those programs and this kind of functionality is very high compared to the amount of money users are willing to pay.”
