Elon Musk just put his AI startup inside SpaceX. The deal valued the pair at $1.25 trillion.
Now one of the people who helped build modern AI says it is "kind of a failure." Those two facts are hard to square.
Yann LeCun is not a random critic. He ran AI research at Meta for years.
Many call him a "godfather of AI" for his early work. He has since launched his own startup, AMI Labs.
LeCun told CNBC that xAI's trouble starts at the top. Most of the founding team has left, and that makes hiring hard.
"Elon is now in a position that is very, very difficult for him to kind of hire top people in AI," LeCun said. He pointed to how Musk treated the people who left.
He and Musk have feuded for years, so the jab isn't a shock. But the talent drain is real, with several co-founders leaving this past year.
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The sharper point wasn't about Musk at all. LeCun thinks the whole AI business runs on shaky math.
Here it is in plain terms. AI companies charge more for their tools every few months.
But running those tools still costs more than users pay. So investors cover the gap.
That can go on for a while, until it can't. LeCun says the big labs will have to raise prices or cut costs.
If they don't, he warns, "there's going to be a big bubble explosion." The bill for AI is turning out far bigger than people thought.
He's not alone in worrying. Even OpenAI's Sam Altman has reportedly called AI costs a "huge issue."
LeCun has long doubted large language models, or LLMs. That's the tech behind chatbots like ChatGPT.
They're great at coding and math, he says. But they're pricey to run for what people will pay.
His bet is on "world models" instead. That's a different kind of AI that learns how the real world works.
He doesn't expect reliable AI helpers until the field shifts that way. There's money behind his view, too.
AMI Labs raised $1 billion in March. The round valued it at $3.5 billion, all aimed at world models.
LeCun says xAI now rents out its computing power to win back the cost. Those are the Colossus data centers in Memphis.
Google and Anthropic are among the renters. It's a bit like building a giant office tower and leasing the floors you can't fill.
He may turn out to be wrong about xAI. But the bubble math is the part Wall Street can't wave away.
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