Elon Musk’s xAI Looks To Raise $6 Billion Investment  

Elon Musk’s artificial intelligence startup xAI, which set out to create AI tools that “assist humanity in its quest for understanding and knowledge,” is currently in discussions to gain investments of up to $6 billion at a proposed value of $20 billion, according to The Financial Times.

This announcement comes as the Tesla CEO looks to power up to compete with OpenAI.

According to the report by The Financial Times, xAI has been in discussions with family firms in Hong Kong and is aiming to gain investments from sovereign wealth funds in the Middle East.

Competition in this space has been becoming increasingly fierce, with several investors putting down large sums of money on startups with hopes of cashing in on last year’s most prominent and innovative new players in Silicon Valley.

In a filing with the U.S. Securities and Exchange Commission last month, xAI set out to raise $1 billion, but it has significantly raised the bar. With its valuation at $20 billion, it would only be a portion of OpenAI’s value. However, it is aligned with other peers such as Anthropic, which is backed by Google.

As reported by The Financial Times, xAI has reached out to investors in Japan and South Korea in its latest fundraising, and Morgan Stanley is spearheading the fundraising efforts, having been one among many banks involved in financing Musk’s acquisition of social media platform X.

A report last week stated that xAI had secured $500 million toward its initial $1 billion funding aim. However, Musk denied this.

A chatbot setting out to compete with OpenAI’s ChatGPT called “Grok” was launched by xAI last year.

According to Reuters, Musk said that unless he gets more voting control of 25% at the electric vehicle maker, he would be not feel comfortable building Tesla into an AI leader. He would instead “prefer to build products outside of the electric-vehicle manufacturer.”

With ChatGPT taking off so well, the AI industry has been on a separate trajectory in the otherwise grim funding landscape. In the last few months, Anthropic and Microsoft-backed Inflection AI have also raised funds.