Billionaire Elon Musk artificial intelligence (AI) startup xAI announced on Sunday that the company has raised $6 billion in Series B funding, bringing the company’s post-investment valuation to $24 billion.
Investors in xAI’s $6 billion Series B round included Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal and Kingdom Holding, according to the company.
Musk’s xAIwhich was publicly unveiled in July 2023, explained that it plans to use the cash injection to further develop and commercialize products.
“xAI will continue this steep trajectory of progress in the coming months, with multiple exciting technology updates and products to be announced soon,” the company wrote. “The funds from the round will be used to bring xAI’s first products to market, build advanced infrastructure and accelerate research and development of future technologies.”
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Musk wrote in a post on X that xAI had a pre-money valuation of $18 billion before closing the deal Series B financing round.
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“More will be announced in the coming weeks,” Musk added in a separate post.
The financing announcement comes after the company launched its Grok chatbot in November, which has now been incorporated into the X for users who purchase a subscription to the social media platform.
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In December, xAI stated in a regulatory filing with the Securities and Exchange Commission (SEC) that it planned to raise $1 billion in capital from equity investors. At the time, the company indicated it had sold about $134 million of that total.
Several times in the past year Musk denied that xAI was raising capital. In response to a January report from Bloomberg News that indicated xAI was discussing a valuation of $15 billion to $20 billion, Musk said this was “simply not accurate,” and also sought to suppress reports of its SEC fundraising filing by saying, “We are not raising any money at this time.”
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xAI’s announcement also stated that the company is “looking for talented individuals who are willing to join a small team focused on making a meaningful impact on the future of humanity.”
“Join xAI if you believe in our mission to understand the universe, which requires a maximally rigorous pursuit of the truth without regard to popularity or political correctness,” Musk added on X.
Musk launched xAI to compete with OpenAI, a company he co-founded before leaving the board of directors in 2018 based on his belief that OpenAI had fallen behind Google in the AI race and that there may be a conflict of interest arising from his pursuit of AI initiatives at Tesla.
Earlier this year, he filed a lawsuit alleging that OpenAI violated its founding agreement to develop AI for the benefit of humanity rather than profit, due to its collaboration with Microsoft.
OpenAI has been pushed back about the lawsuit, saying Musk left the board because he wanted a controlling equity stake, wanted to become CEO and have control over the board. An open letter from Altman and OpenAI co-founders Greg Brockman and Ilya Sutskever discussed this dynamic with Musk and noted his suggestion to merge OpenAI with Tesla.
Source of original article: Elon Musk’s xAI Gets $6 Billion in New Funding and Announces Valuation
