Today, xAI, an artificial intelligence venture initiated by Elon Musk, announced securing a substantial $6 billion in its latest Series B financing round. This significant influx of funds marks one of the most considerable investments in the burgeoning AI sector, positioning xAI to robustly challenge industry giants such as OpenAI, Microsoft, and Google.
A consortium of high-profile investors, including Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity, along with Prince Alwaleed Bin Talal and Kingdom Holding, have contributed to this round, as detailed in xAI’s recent blog post.
This new development aligns with TechCrunch’s earlier predictions in April, which foresaw xAI’s fundraising efforts to reach $6 billion, potentially elevating the company’s worth to $18 billion. xAI, a fledgling company that emerged just a year ago from the social network platform X, is also speculated to have received backing from its parent company.
Elon Musk has verified that the valuation of xAI stood at $18 billion before the addition of the new funds.
Elon Musk, a pioneering figure in the AI industry, heads Tesla, the leading electric vehicle manufacturer renowned for its autonomous driving features. Additionally, he co-founded OpenAI and has significantly invested in it. However, Musk’s relationship with OpenAI has soured, leading to a lawsuit against the company and its co-founder Sam Altman in March, accusing them of deviating from their original mission and effectively becoming an arm of Microsoft. Musk has also leveled allegations against Google for embedding biases within its AI offerings.
Following the establishment of xAI, Musk unveiled the Grok 1.0 model, a competitor to ChatGPT, in November. Subsequently, xAI made this model accessible to Premium+ subscribers on the X platform for a monthly fee of $16. In April, xAI introduced the enhanced Grok 1.5 model and extended access to Premium subscribers on X. The company also showcased the multimodal abilities of Grok in the same month. Earlier, xAI had released the Grok model to the public domain, albeit without the training code.
With the fresh capital from the Series B funding, xAI intends to launch its inaugural product lineup, develop cutting-edge infrastructure, and expedite the research and innovation of emergent technologies, as mentioned in their blog post. The firm is also exploring partnerships to make Grok available to a broader audience beyond the X ecosystem.
The company claims that it aims to develop “truthful” AI systems. Though, Grok’s news summary feature on X is reported to hallucianate and generate misleading information.