xAI, Elon Musk’s artificial intelligence startup aiming to rival ChatGPT developer OpenAI, is set to close a massive $6 billion funding round that values the 10-month-old company at a staggering $18 billion.
TechCrunch reports that according to a trusted source close to the deal, xAI’s funding round is expected to finalize in the coming weeks, giving investors a 25 percent stake in the company. The investment terms were recently adjusted upward from the initial $3 billion raise at a $15 billion pre-money valuation due to strong investor demand.
Notable participants in the round include Sequoia Capital, Future Ventures (co-founded by Musk’s longtime friend Steve Jurvetson), and likely Valor Equity Partners and Gigafund, whose founders are part of Musk’s inner circle. Interestingly, Musk’s social media platform X (formerly Twitter) already owns a stake in xAI and is set to benefit from the AI company’s future success.
xAI’s stated goal is to connect the digital and physical worlds by leveraging training data from Musk’s various companies, including Tesla, SpaceX, Boring Company, and Neuralink. The AI startup’s chatbot, Grok, is already integrated into X/Twitter as a paid add-on, providing the social network with massive distribution while also serving as a customer for xAI.
Musk’s pitch to investors envisions a sprawling virtual cycle, with Grok being fed data from his other companies to master the physical world in countless ways, starting with enabling truly self-driving cars and enhancing the capabilities of Tesla’s humanoid robot, Optimus.
The xAI founder has been openly critical of OpenAI, the company he co-founded in 2015 but left in 2018 due to disagreements over its direction. Musk has publicly criticized OpenAI co-founder Sam Altman and recently open-sourced the architecture of xAI’s earliest chatbot, “Grok-1,” in a move to differentiate his venture from OpenAI’s closed approach.
Read more at TechCrunch here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.