The new model, Gen-4, is better than previous versions at generating characters, locations and objects that look the same across different video clips.
OpenAI's round consists of two tranches: an initial tranche of $10 billion and a second tranche of $30 billion which is expected to come later this year.
The merger will also reduce pressure on Musk to turn around X, whose revenue has fallen by nearly half since he bought it (then named Twitter) in late 2022.
The companies have inked a five-year deal to sell each other's products to customers and promote AI agents, which automate tasks like scheduling appointments.
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