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Godfather of AI blasts Musk's xAI as 'failure,' says labs are risking a 'big bubble explosion'

LeCun said xAI is unlikely to catch OpenAI and Anthropic, citing founder departures, hiring problems and $2.5 billion in operating losses.

  • Yann LeCun, founder of AMI Labs, told CNBC on Thursday that Elon Musk's xAI is "kind of a failure," questioning its ability to compete with frontier AI labs like OpenAI and Anthropic.
  • The founding team has departed, LeCun said, with the final original member, Ross Nordeen, abruptly removed from company systems; Musk now struggles to hire top AI talent.
  • LeCun characterized xAI as a rent-a-data-center operation: "He's got this huge infrastructure, which he rents to other people, because that's the only way he can recoup the costs," he said.
  • OpenAI CEO Sam Altman said this month that AI costs are a "huge issue," noting companies lose money as investor funding sustains most user adoption; LeCun predicted a "big bubble explosion."
  • AMI Labs raised $1 billion in March for a $3.5 billion valuation, pursuing "world models" instead of the large language models sold by xAI, OpenAI, and Anthropic.
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CNBC broke the news in Englewood Cliffs, United States on Thursday, June 18, 2026.
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