Emerging artificial intelligence company xAI, owned by billionaire Elon Musk, is nearing a deal to secure funding of $6 billion, which would result in the company being valued at $18 billion, according to reports from Bloomberg.
The deal is expected to be finalized in the coming weeks if there are no changes to the terms, which include investors receiving a quarter of the company that was established 10 months ago.
A well-known capital investment firm in Silicon Valley has committed to investing in the emerging AI company xAI, supporting Tesla’s CEO efforts in fundraising and competing with OpenAI, Meta, and Google.
Musk spent months trying to raise $6 billion from global investors for xAI, launched in 2023 to better understand the universe.
The billionaire continued to engage with investors who participated in his acquisition of the social media platform Twitter in 2022, inviting them to invest in the AI technology of xAI before others in a funding round that could value the company at around $18 billion or more.
Sequoia Capital is investing in xAI after investing $800 million in Twitter, but it’s not clear how much they are investing in the emerging AI company.
The investment capital firm is a prominent player in investing in companies like Apple, YouTube, and Google, supporting several of Elon Musk’s projects in recent years, including The Boring Company and SpaceX.
Musk appointed Roelof Botha, CEO of Sequoia Capital, as a partner at PayPal in 2000.
Sequoia Capital’s support is a strong boost for Musk, who aims to keep up with competitive emerging companies in AI like Anthropic and OpenAI, as well as major tech companies like Google and Meta.
Developing and running large language models is a very costly process, requiring significant computing power and high-priced hardware for training and operation.
OpenAI raised $13 billion from Microsoft, while Anthropic secured commitments worth $6 billion from Google and Amazon.
Musk has been working on gathering the necessary components to train AI models, hiring engineers and researchers to support advancements in AI.
Investment contributes to speeding up this project and achieving similar performance to the chatbot robot Grok compared to its competitors.
Elon Musk co-founded OpenAI in 2015 with the company’s CEO Sam Altman and others, but he left the company’s board in 2018 after disagreements with Altman over the company’s direction, which initially was a non-profit organization and later became a for-profit company.
