Elon Musk’s artificial intelligence startup xAI is on the verge of closing a funding round that could value the company at $18 billion, according to a report by Bloomberg. This influx of funds would help boost Musk’s project as it faces competition from upstart rivals like OpenAI and Anthropic, as well as Big Tech giants such as Meta, Microsoft, and Google.
The funding round for Musk’s X.AI Corp. could be finalized as soon as this week, with details such as timing, valuation, and the size of the round still being discussed by those familiar with the matter, as reported by Bloomberg. Previous reports indicate that the startup is raising $6 billion at a valuation of around $18 billion, a significant increase from initial estimates.
Notable participants in the funding round reportedly include venture capital firm Sequoia Capital, known for its previous backing of Musk’s projects like PayPal precursor X.com, The Boring Company, and SpaceX. Investors are drawn to Musk’s track record at Tesla and SpaceX, as well as the potential of xAI’s connection to Musk’s social media platform X, which can provide valuable data for training large language models used in products like the Grok chatbot.
Musk announced xAI around a year ago with the goal of understanding the true nature of the universe and rivaling industry leaders like Google’s DeepMind and OpenAI. The billionaire had previously been a cofounder and early backer of OpenAI but left the company due to conflicts and disagreements, particularly around AI safety and profit-seeking. Musk has publically criticized OpenAI for allegedly prioritizing profits over the original goal of developing open-source artificial general intelligence for the benefit of humanity.
With a net worth estimated at $194.7 billion, Elon Musk is currently the third richest person globally. Much of his wealth comes from companies he cofounded and leads, such as Tesla and SpaceX, as well as the social media firm, X, which he acquired in 2022 with plans to transform it into an all-encompassing platform to compete with the likes of China’s WeChat.
The funding for xAI will enable the startup to accelerate its efforts to compete with AI leaders like OpenAI, Meta, Anthropic, and Google. The development of the Grok chatbot, positioned as a rebellious alternative to other language models, will benefit from this funding and aims to match the performance of established AI technologies. Musk’s xAI project seeks to push the boundaries of artificial intelligence and assert itself in the competitive landscape of AI technology.
