Why renting is so unaffordable in 2023

• July 12, 2023

Franklin Schneider | Wealth of Geeks

Rent prices have increased dramatically over the past four decades. Since 1985, rent growth has exceeded inflation by 40% and income by 7%, according to a new study from Real Estate Witch.

While rent prices have climbed steadily upward, wage growth has been more volatile. Since 2011, income has increased about 4% each year. However, if adjusted for inflation, it’s grown just 2% each year, according to the Real Estate Witch study. As the price of rent rises, the purchasing power of the average U.S. worker erodes.

Rent prices remain stubbornly high because there’s a surge of tenants who want their own place to live. The COVID-19 pandemic dramatically accelerated a shift toward solitary living, but construction of new homes and apartments never really recovered from the 2008 financial crisis, and inventory remains incredibly low today.

When you combine a limited resource like housing with pervasive and increasing income inequality, rich people are the ones setting the price,” said Ezra Glenn, a lecturer at the Massachusetts Institute of Technology’s Department of Urban Studies and Planning. “The poor end up having to pay more of their income or get pushed out entirely since we’re all competing in these same limited markets.”

In a country where rent has largely outpaced income, the average rent-to-income ratio has become much less favorable to renters. From 2009 to 2021, the rent-to-income ratio increased in 46 of the 50 most-populous U.S. metro areas.

Up 42%

From 2009 to 2021, the last full year for which data is available, the median rent across the U.S. increased 42% – from $817 a month to $1,163. In high-demand rental markets, rent rose even higher.

In half of the 50 most-populous U.S. metros, rent increased more than 42%. In seven cities, it increased by more than 60%.

In San Jose, rent increased from $1,360 a month to $2,511. That’s an 85% increase in just 12 years, which equates to about 7% growth each year.

As extreme as San Jose’s rent increase may seem, some cities may be on pace to surpass it. In six U.S. cities, rent increased by 9% or more from 2022 to 2023.

Beating 92% of incomes

In a textbook definition of inflation, wages should rise in tandem with prices. But that’s not what working Americans have experienced. The affordable housing crisis across the U.S. exists because in 46 of the 50 most-populous metros, rent growth has exceeded income growth.

One of the hottest real estate markets is In Denver, where rent exceeded income by a staggering 71% – the highest percentage among all 50 cities studied. Denver isn’t the only city where the gap between rent and income is growing rapidly. In seven cities, rent surpassed income by more than 50%.

Since 2009, income growth has exceeded rent growth in only four U.S. cities: Providence, Rhode Island; Buffalo, New York; Cleveland; and Pittsburgh.

Those cities remain bastions of affordability, in part, because they’ve experienced lower population growth than in other cities where rent has increased sharply. From 2009 to 2021, the population did not grow by more than 1,500% in any of those four cities. By contrast, the population grew by at least 1,500% in all seven cities where rent exceeded income by more than 50% from 2009 to 2021.

However, if renters started flocking to affordable cities for their low prices, increased demand would likely cause rent to rise.

Most/least affordable

Financial experts suggest paying no more than 30% of gross monthly income on housing. On average, Americans spend about 20% of their monthly wages on rent.

Miami renters have the highest rent-to-income ratio, spending 28.5% of their monthly income on rent. Miami residents are squeezed on both sides by high rent and low pay. Their monthly payment of $1,492 is 28% higher than the national median rent price, while their annual income of $62,870 is 9% less than the U.S. median income.

On the other hand, Cincinnati renters have it good, spending just 15.5% of their monthly income on rent. Better yet, Cincinnati renters earn $70,308 – 2% more than the national median income – and pay just $906 a month on rent – 22% less than the national median.

Behind Cincinnati, Pittsburgh, St. Louis, Minneapolis, and Buffalo, New York, are the most affordable cities for renters, with rent-to-income ratios below 17%.

This article was produced by Real Estate Witch and syndicated by Wealth of Geeks.

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Domino’s Pizza to offer delivery via Uber Eats

• July 12, 2023

By Daniela Sirtori-Cortina | Bloomberg

Domino’s Pizza shares jumped after the company announced a third-party ordering agreement with Uber Technologies.

The deal will allow US diners to order Domino’s through the Uber Eats and Postmates apps, according to a statement Wednesday. Orders placed on the platform will be delivered by uniformed Domino’s drivers.

“Given certain customers only order their delivery from the Uber Eats app, this deal could make Domino’s available to millions of new customers around the world,” Domino’s Chief Executive Officer Russell Weiner said in the statement.

Domino’s shares surged as much as 17% in New York trading, the most since February 2020. It was up 9.8% at 10:07 a.m., the most since October.

The company will do a test in four pilot markets in the fall and is expecting to roll out the service across the country by the end of 2023. Uber Eats will be Domino’s exclusive third-party platform in the US until at least 2024.

Domino’s said the move will help it access new customers, and that it expects “a meaningful amount of incremental delivery orders” once the platform is widely available.

Ann Arbor, Michigan-based Domino’s benefited from elevated consumer demand during the pandemic but has struggled in recent quarters after Americans returned to in-person dining and some lower-income consumers switched to eating at home.

“The partnership will likely boost Domino’s struggling domestic delivery sales and improve franchisee economics,” Peter Saleh, an analyst at BTIG, wrote in a note to clients.

​ Orange County Register 

Surfing Walk of Fame to honor surf icon Dick Metz, local hero “Chuy” Madrigal

• July 12, 2023

This year’s Surfing Walk of Fame inductees, who will earn a granite stone on the corner of Main and Pacific Coast Highway, include a list of local wave riders who have helped spread stoke within the surf culture.

“Every single one of these honorees has had a profound impact on the sport and culture of surfing. The 2023 class has some serious heavyweights in it,” said Peter Townend, surfing’s first-world champ who also oversees the Walk Of Fame. “From great competitors to the environment to making wave-riding more accessible to exploring the possibilities that lie beyond the horizon, there’s so much inspiration in this group.”

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Surfing Heritage and Culture Center co-founder Dick Metz is being honored as “Surf Pioneer.” Born in 1929 and raised in Laguna Beach, Metz was a long-time friend and business partner of surfboard shaper Hobie Alter, who revolutionized the sport when foam blanks were popularized.

Metz was also the inspiration for another friend, filmmaker Bruce Brown.

In 1958, Metz made “one of the first great around-the-world surf adventures, uncovering Cape Saint Francis in South Africa along the way,” reads the announcement for the event.

Metz would return to Dana Point to tell Brown about the adventures, urging him to take the same routes with a camera and two stylish surfers, including Huntington Beach’s Robert August, for the cult-classic surf film, “The Endless Summer.”

Metz spent much of the ’60s living in Hawaii running the Hobie shop in Honolulu, launched Surfline Hawaii with Dave Rochlen and later opened several other Hobie shops on both the West and East coasts.

Artist Robert “Chuy” Madrigal, center, is being inducted as “Local Hero” into the Surfing Walk of Fame in Huntington Beach on Aug. 3, 2023. (File photo by Michael Fernandez, Contributing Photographer)

Another familiar surfer is this year’s “Local Hero” inductee, Robert “Chuy” Madrigal, a well-known fixture in Huntington Beach since the ’70s.

“Bursting with talent, beyond his skills on a surf and skateboard, he’s also an incredibly talented artist, writer and event promoter,” reads the announcement.

Madrigal has long worked as a business liaison between the U.S. and Mexico, working with the U.S. Embassy and other governmental agencies.

Jesse Billauer, founder of Life Rolls On, holds up his surfboard. The non-profit helps get other paralyzed surfers in the water. Billauer is one of the inductees for this year’s Surfing Walk of Fame. (File photo: Julie Busch, The Press-Enterprise/SCNG)

Jesse Billauer’s story is well known throughout the surf world: an up-and-coming competitor from Pacific Palisades who suffered spinal cord injuries at age 17.

Despite paralysis, Billauer would charge waves and inspire other wheelchair users to surf through his nonprofit Life Rolls On, which holds regular beach gatherings in Huntington Beach and Malibu.

Billauer is also a three-time ISA adaptive world surfing champion and was featured in the surf film, “Riding Giants.”

Just down the road, San Diego’s Don Hansen is landing on the “Honor Roll” for his contributions to the sport. After graduating high school in South Dakota, he hitchhiked to California and found himself in Santa Cruz shaping boards out of Jack O’Neill’s shop in 1958. In the mid-’60s, he would call San Diego home and opened up a shop under his own name, Hansen Surfboards.

This year’s “Surfing Champion” honor goes to Australia’s Cheyne Horan, one of the most influential surfers in the late ’70s and early ’80s pro surfing movement.

“Growing up in the talent-rich Bondi Beach surf teen, Horan was a teen sensation with a penchant for pushing the envelope,” the announcement reads. Joining the high-profile Bronzed Aussies in 1977, he’s often credited with inventing the floater maneuver.

These days, he lives, shapes and coaches in Australia.

Another Aussie, Pauline Menczer, is this year’s “Woman Of The Year.” She started surfing at age 14, and by 1993, she was world champion, despite having no sponsors and having to self-fund her world travels to stay on tour. She retired in 2006 with more than 20 world tour wins, and “her steely determination and conviction was a game-changer for women’s professional surfing,” the announcement reads.

Pauline Menczer, of Australia, was once a competitor at the U.S. Open of Surfing in Huntington Beach. She is earning the Woman of the Year induction it the Surfing Walk of Fame on Aug. 3, 2023. (Photo by Starr Buck, The Orange County Register/SCNG)

Patagonia founder Yvon Chouinard, “one of the most visible and outspoken advocates for the planet,” is earning the “Surf Culture” award.

He grew up surfing and rock climbing and eventually turned his passion into one of the world’s most successful outdoor companies.

“Calling himself an ‘existential dirt bag,’ in 2022, he made headlines when he announced he was donating Patagonia, worth $3 billion, to a trust dedicated to fighting the climate crisis,” reads the announcement.

The induction ceremony is scheduled for 10 a.m. on Aug. 3 in front of Jack’s Surf Shop. More info: surfingwalkoffame.com.

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How health care may be affected by the high court’s affirmative action ruling

• July 12, 2023

Michelle Andrews | (TNS) KFF Health News

Doctors are concerned that a Supreme Court ruling issued June 29 will have far-reaching effects not only on the diversity of doctors and other care providers in training but ultimately also on patient care.

The decision found it is unconstitutional for colleges and universities to use race as a factor in student admissions, which will affect enrollment decisions at public and private educational institutions, including medical schools.

Like other academic institutions, medical schools have long factored race into admission decisions. The schools operated under the principle — and there is considerable evidence they are correct — that a more diverse workforce of doctors does a better job of treating diverse patients.

The “decision demonstrates a lack of understanding of the critical benefits of racial and ethnic diversity in educational settings and a failure to recognize the urgent need to address health inequities,” read a statement from David Skorton, president and CEO of the Association of American Medical Colleges, and Frank Trinity, its chief legal officer.

Chief Justice John Roberts wrote the majority opinion. It held that the admissions programs of defendants Harvard College and the University of North Carolina violate the equal protection clause of the 14th Amendment, which prohibits racial discrimination. The decision overturned decades of legal precedent that had allowed colleges and universities to evaluate prospective students by their race, in addition to factors such as academic records and test scores.

In a dissent, Associate Justice Sonia Sotomayor wrote on behalf of the court’s three liberal justices that the ruling “cements a superficial rule of colorblindness as a constitutional principle in an endemically segregated society where race has always mattered and continues to matter.”

What Does the Ruling Mean for Med Schools?

The decision may have serious repercussions, medical educators say.

The AAMC, which represents more than 500 medical schools and teaching hospitals, filed an amicus brief with the court arguing that diversity in medical education “literally saves lives” by ensuring that doctors, nurses, and other medical professionals can competently care for an increasingly diverse population.

“Diversity in health care providers contributes to increased student, trainee, and physician confidence in working with patient populations who are different from their own identities,” said Norma Poll-Hunter, senior director of workforce diversity at the AAMC.

Although it’s impossible to predict the full impact of the court’s ruling, looking to some of the nine states that already have bans on race-conscious college admissions may provide clues. An analysis of bans in six states found that medical school enrollment of students of color who were members of underrepresented groups fell roughly 17% after the bans were instituted.

What About Patients?

At this point it’s hard to say.

Despite the United States having one of the world’s most advanced systems of medical research and clinical care, Black people and some other minorities often fare worse than white people across a range of health measures. Their life expectancies are shorter: 65.2 years for American Indian and Alaska Native people and 70.8 for Blacks in 2021, versus 76.4 for whites, according to KFF. Black and AIAN infants were roughly twice as likely to die as white infants, and women in those minority groups had the highest rates of mortality related to pregnancy in 2021.

Research shows people of all races tend to prefer to see physicians who are similar to them in race or ethnicity, according to Poll-Hunter. When patients are of the same race as their provider, they report higher levels of satisfaction and trust and better communication.

When patients are of the same race or gender as their provider, they may also have better health outcomes, research shows.

For example, in a study of 1.8 million infants born in Florida hospitals between 1992 and 2015, Black newborns were half as likely to die when cared for by Black physicians as when their doctors were white. Research has historically focused on white newborns with white doctors, said the study’s lead author, Brad Greenwood, a professor of information systems and operations management at George Mason University.

“To the extent that physicians of a social outgroup are more likely to be aware of the challenges and issues that arise when treating their group, it stands to reason that these physicians may be more equipped to treat patients with complex needs,” according to the study.

However, the solution is not to try to ensure all Black patients are seen by Black physicians, Greenwood said.

“Jim Crow-ing medicine is not going to solve this,” he said, referring to laws enacted in the 19th and 20th centuries that enforced racial segregation.

Ensuring a diverse physician base can improve care for all patients, including those from marginalized groups. “As you increase diversity, the diversity of opinion increases the scope of how people think about things and express best practices,” he said.

Do No Harm, a group of medical and policy professionals who oppose race-conscious medical school admissions and other policies that incorporate identity-based considerations into health care decision-making, says race-conscious admission is about discrimination, not diversity.

“Our view is that whoever gets into health care should be the most qualified,” said Stanley Goldfarb, who chairs the board of Do No Harm. “It doesn’t matter the gender or the race. The only thing that matters is that they’re good, ethical people and good at what they do.”

Goldfarb cited studies that showed “no relationship” between race or ethnicity concordance and the quality of communication, and “inconclusive” evidence for patient outcomes.

The first med school class that will be affected will be the class of 2028. Some experts have suggested that colleges and medical schools may adopt policies that take income or family wealth into account when determining whom to admit. After California banned race-conscious admissions in 1996, the medical school at the University of California-Davis upended its process to put less emphasis on MCAT scores and grades and more on socioeconomic measures, according to Stat.

Poll-Hunter, with the AAMC, isn’t convinced. “There’s no substitute or proxy for race,” she said. “The reality is that in the United States we have a history of exclusion, displacement, and colonization such that we can’t ignore the reality of race.”

___

(KFF Health News, formerly known as Kaiser Health News (KHN), is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs of KFF — the independent source for health policy research, polling and journalism.)

©2023 KFF Health News. Distributed by Tribune Content Agency, LLC.

​ Orange County Register 

Tech company calculates the cost of work meetings

• July 12, 2023

By Jennifer Korn | CNN

One tech company is escalating its war on meetings by introducing a calculator that shows employees how much it really costs to force dozens of their colleagues to huddle together for an hour instead of just sending an email.

Shopify, a Canadian e-commerce company, rolled out its Meeting Cost Calculator internally Wednesday as part of ongoing efforts to encourage emptier calendars. The tool functions as a Chrome extension built into Google Calendar, showing Shopify’s 11,000-plus global employees the estimated cost of their meetings by using data based on average compensation, number of attendees and length.

The average 30-minute meeting with three employees at the company costs between $700-$1600, according to an internal note shared with CNN Wednesday. By getting rid of even three meetings a week per person, Shopify estimates it will see a 15% reduction in overall costs.

Shopify first took steps to reduce unnecessary meetings in January by doing away with all previously scheduled recurring meetings involving three or more people. It also enforced meeting-free Wednesdays and limited large meetings with over 50 people to a six-hour window on Thursdays.

But the company says its initial effort wasn’t enough.

“[W]e have seen meeting creep seep back in and we needed to take immediate action,” the company wrote in the internal note this week. “Time is money, and it should be spent on helping our merchants succeed or having fun – meetings frequently do neither.”

While the tool puts the cost of meetings into monetary terms, the company stresses that it is ultimately less focused on the dollar value and more on the wider need to reconsider how time is spent.

“The Meeting Cost Calculator is here to challenge the status quo, nudging us to reconsider meeting necessity and explore more creative collaboration methods,” the company wrote.

​ Orange County Register 

Under fire from House GOP, Wray defends the ‘real FBI’

• July 12, 2023

By Farnoush Amiri, Eric Tucker and Lisa Mascaro | Associated Press

WASHINGTON — FBI Director Chris Wray defended the “real FBI” during a contentious congressional hearing Wednesday, dismissing a litany of grievances from Republicans who are harshly critical of the bureau, threatening to defund some operations and claiming the Justice Department is unfair to political conservatives.

Wray refused to engage in specific questions about ongoing federal investigations, including those involving former President Donald Trump and Hunter Biden. The son of President Joe Biden recently reached an agreement to plead guilty to misdemeanor federal tax charges; Republicans have derided that as a sweetheart deal.

In testy exchanges with Republicans on the House Judiciary Committee, Wray rejected the GOP assertion that the bureau was favoring the Biden family and said the notion that the bureau was involved the Jan. 6, 2021, attack on the Capitol was “ludicrous.”

“The work the men and women of the FBI do to protect the American people goes way beyond one or two investigations that seem to capture all the headlines,” Wray said in his opening remarks.The director spelled out the bureau’s crime-fighting work breaking up drug cartels, taking some 60 suspected criminals off the streets each day and protecting Americans from “a staggering array of threats.”

He said, “That is the real FBI.”

It’s the latest display of the new normal on Capitol Hill, where Republicans who have long billed themselves as the champions of police and “law and order” are deeply at odds with federal law enforcement and the FBI, accusing the bureau of bias dating to investigations of Trump when he was president.

This new dynamic has forced Democrats into a position of defending these law enforcement agencies they have long criticized.

The committee chairman, Republican Rep. Jim Jordan of Ohio, said he is trying to stop what Republicans call the “weaponization” of the federal justice system, which they say is tilted against conservatives, including Trump and his allies.

Jordan opened the hearing reciting a federal judge’s recent ruling against the government’s efforts to halt misinformation on social media before listing other grievances against the FBI over its treatment of conservatives.

But the top Democrat on the committee, Rep. Jerrold Nadler of New York, said the hearing was “little more than performance art” by the Republicans who are undertaking what he called baseless investigations too far-fetched to be true.

During one tense exchange with Rep. Matt Gaetz, R-Fla., Wray noted that in Florida, the number of FBI applicants is up by more than 100 percent.

“We’re deeply proud of them, and they deserve better than you,” Gaetz said.

Wray became animated at one point by the suggestion from Rep. Mike Johnson, R-La., that the FBI would have been involved in suppressing a theory that the coronavirus pandemic originated via a leak from a laboratory in China rather than a transfer from animals to humans.

“The idea that the FBI would somehow be involved in suppressing references to a lab leak theory is somewhat absurd when you consider the fact that the FBI was the only — the only — agency in the entire intelligence community to reach the assessment that it was more likely than not that was the explanation of the pandemic,” Wray said, pointing with his index finger for emphasis.

Rep. Zoe Lofgren, D-Calif., said she thought it was “actually sad that the majority is engaging conspiracy theories in an effort to discredit one of the premier law enforcement agencies in the United States.”

Jordan has been laying the groundwork for Wray’s appearance since House Republicans took the majority in January.

Republicans have held hearings with former FBI agents, Twitter executives and federal officials to make the case that the FBI has been corruptly using its powers against Trump and the right. The GOP has formed a special committee on “weaponization” of government, also led by Jordan, to investigate abuse.

Along with GOP leaders of the House Oversight and Accountability Committee and the House Ways and Means Committee, the panels opened a joint investigation into the Hunter Biden case, citing testimony from two IRS whistleblowers who say the Justice Department meddled with their work.

The department has denied the allegations and said that U.S. Attorney David Weiss in Delaware, the federal prosecutor who led the investigation, always had full authority over the case. Weiss was appointed during the Trump administration.

Republicans have requested interviews with Weiss and other Justice Department officials, but those are not likely until after the case is closed, in line with department policy.

Hanging over the proceedings were GOP threats to impeach Attorney General Merrick Garland and withhold money for federal law enforcement as Congress in the midst of preparing annual spending bills.

At one point, Rep. Thomas Massie showed a short surveillance video moments before officials found a pipe bomb outside the Democratic National Committee’s Capitol Hill headquarters on the day of the Jan. 6, 2021, attack. Massie, R-Ky., demanded answers about the investigation.

“We fund your department so you need to provide that,” Massie said.

Another focus of the hearing was the push to reauthorize a program under the Foreign Intelligence Surveillance Act, or FISA, that grants agencies such as the FBI broad powers to surveil and examine communications of foreigners outside the United States.

A provision known as Section 702 is set to expire at year’s end unless Congress agrees to renew it. Members of both parties are frustrated with the program, citing allegations of federal officials abusing the system.

Wray, meanwhile, discussed a difference of opinion over Garland’s 2021 memo instructing the FBI to coordinate with local law enforcement over threats against school boards. Republicans have complained that went too far in trying to police parents.

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“I will say to you the same thing that I said to all 56 of our field offices as soon as I read the memo, which is that the FBI is not in the business of investigating or policing speech at school board meetings or anywhere else for that matter,” said Wray, who has led the FBI since Trump nominated him after firing James Comey in 2017.

The Justice Department has accused Trump of illegally storing government secrets at his Florida estate and then refusing to give them back after he left office. Trump has pleaded not guilty to 37 felony counts. A separate Justice Department investigation is probing efforts by Trump and his allies to undo Biden’s election in the run-up to Jan. 6, 2021.

Some of the GOP’s most conservative members are pushing to cut off some funding for the FBI, and Speaker Kevin McCarthy, R-Calif., has questioned a plan to move the FBI headquarters from downtown Washington to a suburb in Virginia or Maryland. He has said Congress should focus on FBI offices in the states.

​ Orange County Register 

New signs of Westminster’s civic failure

• July 12, 2023

Westminster has for years struggled with a financial meltdown even as council members squabbled over political matters in the Vietnamese media and a proposed Vietnam War memorial – and verbally chastened one another from the dais. Even the possibility of bankruptcy didn’t stop the infighting.

Residents bailed out City Council by voting overwhelmingly in November 2022 to extend the city’s “temporary” 1 percent sales tax until 2043. Tax supporters said the tax boost was needed to “prevent cuts to 911 emergency response, police, gang/drug prevention, firefighters, paramedics, emergency response equipment, disaster preparedness” and so forth.

Unfortunately, council elections that year didn’t yield any significant change in approach. This Editorial Board complained that “none of the candidates running for mayor nor either of the open council seats has anything insightful to say about the city’s woes.” Some craziness has subsided, but the city now is turning to a fiscal gimmick to bolster its budget.

City Council agreed last month to build two LED billboards along the 405 freeway. As VoiceofOC reports, Westminster is tapping a private firm to operate the signs, with promises of at least $63 million in advertising revenue over 30 years. The council meeting had little public debate, with details mostly hashed out during closed session. So who knows if those estimates are credible?

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Critics say the signs will create blight and safety issues. The proposal was developed by staff, which was instructed to propose revenue sources when the council in May approved a “strategic plan.” During the May meeting, the city manager and council members sparred over transparency issues in choosing the vendor, but the council was happy with the final choice.

This isn’t the worst idea in a city that’s home to 29 billboards. But it’s not the best one, either. Well-managed cities look closely at improving their basic functions by, say, reducing pension debt and outsourcing services – not coming up with quick-buck ideas to paper over systemic problems.

As commuters drive past the bright LED ad messages, they should view the billboards as a sign of Westminster’s poor financial management.

​ Orange County Register 

Elon Musk announces new company xAI as he seeks to build ChatGPT alternative

• July 12, 2023

By Rachel Metz | Bloomberg

Elon Musk, who has hinted for months that he wants to build an alternative to the popular ChatGPT artificial intelligence chatbot, announced the formation of what he’s calling xAI, whose goal is to “understand the true nature of the universe.”

On a website unveiled Wednesday xAI said its team will be led by Musk and staffed by executives who have worked at a broad range of companies at the forefront of artificial intelligence, including Google’s DeepMind, Microsoft Corp. and Tesla Inc., as well as academic institutions such as the University of Toronto.

Musk was involved in the creation of OpenAI, the highest-profile AI startup and developer of ChatGPT. But he has frequently and publicly criticized OpenAI since he left the board in 2018, especially after it created a for-profit arm the following year. He has said he believes it to be “effectively controlled by Microsoft.” Microsoft has invested some $13 billion into OpenAI.

Despite his work in AI, Musk has expressed deep reservations about the technology. The billionaire was among a group of researchers and tech industry leaders who in March called for developers to pause the training of powerful AI models.

The 12 men listed on the website as of Wednesday morning (including Musk) include Jimmy Ba, an assistant professor at the University of Toronto who studied under AI pioneer Geoffrey Hinton, and Christian Szegedy, who spent years as a research scientist working on AI at Google.

Though Musk is a frequent critic of San Francisco, the xAI website says that the company is “actively recruiting experienced engineers and researchers” to work “in the Bay Area.” So far, most AI development has been concentrated in Silicon Valley.

Musk and Jared Birchall, who operates Musk’s family office, incorporated a business called X.AI in March, according to a Nevada state filing with the Secretary of State.

In April, the Financial Times reported that Musk was holding discussions with Tesla and Space Exploration Technologies Corp. investors about helping fund an AI startup, citing unidentified people familiar with the matter. The billionaire has acquired thousands of processors from Nvidia Corp. for the new project, the paper said.

The xAI website said the company is being advised by Dan Hendrycks, who is the director of the Center for AI Safety — a group that has warned about what it sees as existential dangers of developing AI quickly. This spring, it released a letter of caution signed by chief executive officers of some of the leading companies in AI, including Alphabet Inc.’s DeepMind and OpenAI.

Musk, 52, now oversees six companies: Tesla, SpaceX, Twitter, Neuralink, the Boring Co. and now xAI. In regulatory filings, Tesla says the auto giant is “increasingly focused on products and services based on artificial intelligence, robotics and automation.” Tesla’s website invites people to help “build the future of artificial intelligence” with a variety of products, from the “Tesla Bot” known as Optimus to AI interface chips that will run the electric automaker’s automated driving software.

Musk has a long history of borrowing engineers from one company to help out at another, as the contours of his ever-expanding empire bleed into one another. Tesla and SpaceX share a vice president of materials engineering, for example, and engineers from Tesla “volunteered” to work at Twitter after Musk bought the company for $44 billion in October.

The xAI website says that it is a “separate company from X Corp,” the parent company that Musk merged Twitter into earlier this year, but that it will “work closely with X (Twitter), Tesla, and other companies.”

–With assistance from Dana Hull and Sean O’Kane.

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.

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