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

Elon Musk's xAI is a "failure" that will be unable to compete on the frontier of artificial intelligence, Yann LeCun, founder of AMI Labs, told CNBC, as he laid out his view on what could cause a "big bubble explosion" in the industry.

LeCun's comments renew a long-running spat with Musk and cast doubt over valuations of some of the world's biggest AI companies.

LeCun, who was previously Meta' s chief AI scientist, has clashed with Musk over the past few years on topics ranging from AI to what he described as the Tesla CEO's "conspiracy theories" on social media. Musk for his part, has accused LeCun of being "out of touch with AI for a long time."

LeCun is often dubbed a "godfather of AI" because of his early work in the field.

"xAI is kind of a failure, frankly, because the founding team has" departed, LeCun said.

"Elon is now in a position that is very, very difficult for him to kind of hire top people in AI, because he's kind of, you know, not behaved in sort of very good ways toward the ... previous team."

Over the last year, several of xAI's co-founders have left the organization. In February, Musk merged SpaceX with xAI in a huge deal that valued the company at $1.25 trillion.

In the three months ended Mar. 31, SpaceX's AI segment, which includes xAI, posted a $2.5 billion loss from operations. Meanwhile, AMI Labs raised $1 billion in a funding round in March in pursuit of world models, which amounted to a pre-money valuation of $3.5 billion.