[Global Focus] Musk vs Zuckerberg... The Second Battlefield is 'Chatbot'

Past Debate Over SNS 'Seuredeu' Launch
Race to Secure Collaboration with Next-Generation OpenAI

Last year, Elon Musk, CEO of Tesla, and Mark Zuckerberg, CEO of Meta Platforms, who engaged in heated exchanges on social networking services (SNS) and nearly came to a so-called 'face-to-face fight,' have now entered a direct confrontation over artificial intelligence (AI) chatbots. Last month, Zuckerberg unveiled 'MetaAI,' a next-generation language model-based chatbot, while Musk expressed his intention to join the forefront of AI by securing $6 billion in investment for xAI, the maker of the AI chatbot 'Grok.' Recently, both have even shown moves to get ahead by securing collaborations with next-generation AI startups poised to succeed OpenAI.

Round 1, SNS Verbal Battle

The period when the conflict between Musk and Zuckerberg was most prominently displayed was June last year, marked by SNS verbal battles and even challenges to a cage fight. At that time, Zuckerberg was accelerating the development of 'Threads,' an SNS positioned as a rival to Twitter. After Musk acquired Twitter and faced backlash from existing users due to daily post viewing limits and service monetization, Zuckerberg saw this as an opportunity to take a share of Twitter's pie.

As Zuckerberg hoped, Threads surpassed 100 million subscribers within five days of its launch in July last year, attracting intense market interest. However, the initial hype around Threads did not last long. It was insufficient to surpass the dominance of X (formerly Twitter), which had been built up since the Twitter days. According to global app market analytics firm Sensor Tower, in February, the daily active users (DAU) of X in the U.S. was 27 million, far exceeding Threads' 1.6 million. As of Q1 2024, the gap in monthly active users (MAU) worldwide was also significant, with X at 349 million and Threads at 85 million.

Shortly after Threads' launch, Musk disparaged it on his Twitter account, saying, "Threads is just Instagram without photos (operated by Meta)" and accused Zuckerberg of turning Instagram users into Threads subscribers. Undeterred, Zuckerberg fired back, saying, "The reason Twitter did not succeed as expected was due to a lack of familiarity and kindness," adding, "I will not operate Threads like Twitter."

Round 2, AI Chatbots

The competitive dynamic between Musk and Zuckerberg continues in the AI chatbot business. A notable example is recent foreign media reports about xAI and Meta competing over a business partnership with the U.S. startup Character.ai. Character.ai is a chatbot service provider that enables conversations with various virtual characters, founded in 2021 by Noam Shazeer, a former researcher at Google's deep learning AI team, Google Brain. In March, it ranked third in the 'Most Used AI Services Worldwide' list selected by the global venture capital firm Andreessen Horowitz, gaining attention as a promising next-generation AI contender following OpenAI.

Both Musk and Zuckerberg aggressively invest in generative AI with the goal of developing Artificial General Intelligence (AGI)?AI with intelligence equal to or surpassing humans?making collaboration with promising startups like Character.ai an opportunity they cannot miss. Meta first unveiled 'MetaAI,' a chatbot based on the next-generation large language model LLaMA 3 last month. Previously, Meta introduced 'Persona' technology, which applies the personalities of famous celebrities to chatbots, and plans to integrate MetaAI into its flagship SNS platforms such as Instagram, Facebook, and WhatsApp. Zuckerberg introduced MetaAI by saying, "Meta AI can answer user questions, create animations, and generate images," and added, "We believe MetaAI is the most intelligent AI assistant freely available."

For Musk, who founded xAI to create a rival to ChatGPT, collaboration with promising companies like Character.ai is essential. xAI, established by Musk in July last year, attracted market attention by launching the AI chatbot 'Grok' just four months after its founding. xAI accelerated development by releasing the latest AI model 'Grok 1.5' earlier this year and recently succeeded in raising $6 billion (approximately 8.2 trillion KRW) in investment, aiming to join the AI leadership ranks. xAI's valuation also rose from $18 billion (approximately 24.5 trillion KRW) to $24 billion (approximately 32.7 trillion KRW). It is reported that xAI is currently considering building a supercomputer to operate the next version of Grok.

Big Tech's Startup Hunt... "Welcoming the AI Golden Age"

The significant stake OpenAI holds is a major reason why these two companies are focusing so much on AI chatbots and startup investments. Having witnessed the influence of ChatGPT, which led the AI boom, in real time, Musk and Zuckerberg inevitably felt a sense of urgency. Additionally, both are owners of companies operating SNS platforms used by hundreds of millions worldwide, such as X, Facebook, and Instagram. From the perspective of smoothly sourcing the massive amounts of data required for training generative AI models through SNS, AI chatbots represent an unmissable business opportunity.

Microsoft (MS), recognizing OpenAI's potential, took the lead by investing hundreds of trillions of won, becoming a major funder and igniting AI chatbot investment and development across the industry. According to The New York Times (NYT), Sam Schillace, MS's Chief Technology Officer, urged employees to focus on AI technology development, saying, "Speed is more important than ever."

The startup hunt by big tech companies aiming to become leaders in the AI era is expected to intensify. Wedbush analyst Dan Ives stated, "Big tech has started to flex its muscles," and added, "If 2023 was the exploratory phase, 2024 will be the golden age of AI." Microsoft, estimated to have invested $13 billion in OpenAI so far, is also participating in funding the startup MistralAI, known as the 'French OpenAI.' Amazon and Google have joined the arms race by investing $4 billion and $2 billion respectively in Anthropic, an OpenAI competitor. Japan's SoftBank announced plans to invest $9 billion (approximately 12.3 trillion KRW) in AI over the next year. Previously, after Chairman Masayoshi Son announced a major AI investment in June last year, SoftBank invested $8.9 billion in AI over one year.

There is also a lobbying competition among countries to attract promising overseas AI startups. Leading European AI startups such as Germany's Aleph Alpha, the UK's Synthesia, and StabilityAI reported to major foreign media in March that they had been lobbied by government officials from Canada and the United Arab Emirates (UAE). These officials reportedly appealed with various subsidies, tax benefits, and regulatory relaxations to persuade the companies to relocate their headquarters to their countries.