From DeepMind to xAI: A timeline of Musk's AI journey
Plus: PE's tough exits in dental industry, and decadelong tailwinds for buyouts will die down
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Elon Musk has made headlines once again, this time with his AI company and its new $18 billion price tag. Less than a year old, xAI is now one of the most valuable generative AI companies globally. The $6 billion round included investors Andreessen Horowitz and Sequoia.
xAI’s win is also a big win for Musk, whose fascination with AI began long before he launched the company. It dates back to the early 2010s when he made a strategic investment in AI research lab DeepMind. The deal was driven by his desire to stay informed about AI advancements and his growing concern over AI’s potential risks; he described the technology as “far more dangerous than nukes.”
Based on said concerns, Musk and others, including Sam Altman, founded OpenAI as a nonprofit in 2015 to ensure that the development of AI with similar intelligence to humans benefits all of humanity. But the alliance was not to be. Musk left in 2018 to avoid potential conflicts with Tesla’s own AI ambitions.
PitchBook's Leah Hodgson has penciled out the entirety of Musk’s AI journey—from his early investments to xAI’s new round.
Pulling teeth: Why dental sector exits have been tough for PE
PE firms have encountered an obstacle when it comes to exiting larger dental platforms, compounded by challenges surrounding physician retention and compensation, writes reporter Janelle Bradley .
As of Q1 2024, 37 PE-backed dental platforms in the US and Canada have been in managers' portfolios for more than five years—17 of these for more than seven years.
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Why economic growth doesn't equal a buyout boom
The tailwinds that have propelled buyout fund performance over the past decade will die down in the coming years. While buyout dealmaking rebounded slightly at the beginning of the year, activity remained below its historical average, where it's likely to remain until interest rates come down.
Our latest Quantitative Perspectives report breaks down how strong economic growth, low unemployment and above-target inflation have diverted the Federal Reserve's focus away from lowering interest rates, a development that has a material impact on the buyout market.
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