AI Daily: xAI in talks with Valor Equity to raise up to $12B for AI plans

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

EXPANSION PLANS: xAI, the AI startup run by Tesla (TSLA) CEO Elon Musk, is working with Valor Equity Partners to secure up to $12B more for its expansion plans, just weeks after raising $10B through sales of stock and debt, The Wall Street Journal’s Berber Jin, Peter Rudegeair, and Matt Wirz report. The money would be used to buy a significant supply of advanced Nvidia (NVDA) chips that would be leased to xAI for a new data center meant to help train and power the AI chatbot Grok, according to the report. The startup will likely have to raise even more in the coming months, given the significant sums of cash needed to train large AI models, the report adds.

AI PROJECT: The $500B “Stargate” artificial-intelligence project from SoftBank (SFTBY) and OpenAI, which was unveiled at the White House, has struggled to get off the ground and has sharply scaled back its near-term plans, according to a report by Eliot Brown and Berber Jin of the Wall Street Journal. Six months after the announcement, the venture has yet to complete a single deal for a data center, with the new, more modest goal being to build one small data center by year-end, likely in Ohio. The two companies have reportedly been at odds over crucial terms of the partnership, including where to build the sites. Meanwhile, OpenAI has moved forward without SoftBank, striking a data-center deal with Oracle (ORCL) that will see OpenAI pay more than $30B a year, as well as a smaller deal with CoreWeave (CRWV).

ACQUISITION: “Bee is joining Amazon! (AMZN) We’re incredibly grateful to our customers and community and we’re excited to continue our journey with you,” the company stated in a post on its website. In a LinkedIn post, Maria de Lourdes Zollo added, “Bee is joining Amazon and we couldn’t be more excited! When we started Bee, we imagined a world where AI is truly personal, where your life is understood and enhanced by technology that learns with you. What began as a dream with an incredible team and community now finds a new home at Amazon. Ethan and I couldn’t think of better partners to help us bring truly personal, agentic AI to even more customers. Thank you to everyone who believed in us: our users, investors, and the entire Bee team. You made this milestone possible. Huge gratitude to Panos Panay and Nick Komorous for championing our vision and guiding us through this journey.”

POACHING EMPLOYEES: Microsoft (MSFT) has poached about two dozen employees from Google DeepMind (GOOGL) in recent months, CNBC’s Jordan Novet reports, citing a person familiar with the matter. On Tuesday, Amar Subramanya, who worked at Google for 16 years, most recently as a VP of engineering developing the Gemini assistant, said on LinkedIn that he has joined Microsoft AI as a corporate VP. In June, Adam Sadovsky, with nearly 18 years of experience at Google, moved to Microsoft where he is now a corporate VP at Microsoft AI. Google’s Gemini assistant rivals Microsoft’s Copilot for consumers.