According to a report published by Bloomberg, Elon Musk’s artificial intelligence company xAI has secured commitments worth $500 million from investors with the aim of reaching a billion dollars.
The company is discussing a valuation ranging from $15 billion to $20 billion, although the terms may change in the coming weeks.
Last year, Elon Musk founded his startup as an alternative to Open AI, a company he co-founded but later departed due to philosophical differences in technology use.
The smart chatbot Grok is xAI’s first product, a development based on posts from the social media platform X, also owned by Musk.
Grok, the chatbot, can access recent information while responding to users better than other chatbots.
Investors in both companies are likely to overlap, and Elon Musk has received support from Larry Ellison, Sequoia Capital, Andreessen Horowitz, and Fidelity regarding his $44 billion acquisition deal with Twitter. Investors in both companies are also likely to overlap, and Elon Musk has received support from Larry Ellison, Sequoia Capital, Andreessen Horowitz, and Fidelity regarding the $44 billion acquisition deal with Twitter.
In November, Musk announced that X investors will own 25% of xAI.
Practically, this means these investors are required to invest in xAI 25% of the amount they invested in X.
If they invested $10 billion in X, it means they are called to invest $2.5 billion or more in xAI.
Musk and the investors are expected to finalize the terms in the coming weeks.
All parties are considering the possibility of obtaining computational power with XAI shares, while some parties are considering obtaining computational power only without XAI shares.
Computational power is very useful for investment companies that need to process data in large quantities to develop innovative artificial intelligence products.
In this regard, Elon Musk denied a Bloomberg report and clarified that the report stating his artificial intelligence company xAI has secured commitments worth $500 million from investors to achieve a goal of a billion dollars is inaccurate.
In response to a user on the social media platform X, he announced that this information is not accurate.
Last December, Musk stated that his artificial intelligence company did not raise funds, this came a day after the startup submitted a request to the US Securities and Exchange Commission to raise a billion dollars through stock sales.
