Elon Musk’s : xAI raises $6B from Valor, a16z, and Sequoia
Elon Musk’s AI business, xAI, has secured $6 billion in a fresh investment round, the company said today, as Elon Musk builds up money to fight vigorously with competitors such as OpenAI, Microsoft, and Alphabet.
According to the startup’s blog post, Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity, Prince Alwaleed Bin Talal, and Kingdom Holding are among the investors in xAI’s Series B fundraising round.
The funding confirms TechCrunch’s April story that xAI was trying to raise $6 billion with a pre-money valuation of $18 billion. aise $6 billion with a pre-money valuation of $18 billion. At the time, TechCrunch stated that Elon Musk made sure that X, the social network he currently owns and controls, holds a share in xAI and would profit from whatever growth the AI business sees.
Pre-money valuation was $18B
Elon Musk is one of the first and most well-known entrepreneurs in the AI area. Tesla, the company he runs, is the leading EV manufacturer with self-driving capabilities. He also co-founded OpenAI, a firm for which he spent tens of millions.Elon Musk’s excitement for OpenAI had dimmed since March when he challenged the company and its co-founder Sam Altman for allegedly breaching its mission statement and becoming a “closed-source de facto subsidiary” of Microsoft. He has also accused Google of including bias in its AI products.
Elon Musk’s company launched its chatbot, ChatGPT-rival Grok 1.0 model, in November, a year after introducing xAI. Later, the company made the model available to Premium+ users on X via a chatbot for a monthly fee of $16. In April, the company unveiled the new Grok 1.5 model and gave Premium users on X access to the chatbot. In addition, Musk’s company also demonstrated Grok’s multimodal capabilities. Earlier this year, the company released the Grok model without any training code.
xAI plans to use the money generated from the current investment round to bring its initial set of products to market, construct advanced infrastructure, and accelerate the research and development of future technologies, according to a recent blog post. The business is expected to seek partnerships to expand Grok’s user base beyond X.
The startup, whose new backers include people Elon Musk knows well, such as Ken Howery, a PayPal and Founders Fund cofounder, claims to want to create “truthful” AI systems. Still, like with other AI chatbots, Grok’s news summary function on X has been observed to hallucinate and fabricate false information.
