Elon Musk denies report indicating his AI startup, xAI, has raised $500M in funding
Elon Musk this weekend denied a report that his artificial intelligence startup, called xAI Corp., has secured $500 million in funding, as part of a goal to raise a $1 billion investment.
The billionaire entrepreneur (pictured) posted on the social media platform X, formerly Twitter, that “This is simply not accurate” in response to an earlier tweet that cited a report on the funding by Bloomberg.
Bloomberg’s report said xAI is discussing the terms of a funding round that would value the startup at between $15 billion and $20 billion. It cited people familiar with the matter, before adding that the terms of the deal could change in the coming weeks.
The report claimed that Musk and his proposed backers were planning to finalize the terms of the funding deal over the next few weeks. It added that some were evaluating if it’s also possible to obtain computing power from the startup, either in addition to or instead of equity.
Last month, xAI filed a document with the U.S. Securities and Exchange Commission that suggested it is looking to raise $1 billion via an equity offering. The document indicated that $134 million worth of equity had already been sold.
According to the document, xAI has already entered into a “binding and enforceable agreement for the purchase and sale” of the remaining $865 million in equity that was yet to be sold.
Musk had also denied the December report, saying in an earlier post on X that the startup was “not raising money right now.”
The chief executive of Tesla Inc. and SpaceX Corp. revealed the creation of xAI last summer, in response to the rising trend of generative AI, which has come to dominate the focus of most of the world’s biggest technology companies. Musk was one of the co-founders of ChatGPT creator OpenAI before stepping back in 2018, when he quit a role on its board of directors. He had said on social media at that time that he wanted to create a “maximum truth-seeking AI” that can understand the nature of the universe.
Musk’s AI startup is a distinct entity from X the social media platform, but they are said to be working in collaboration with one another. XAI has also reportedly been working with Tesla.
In November, xAI announced that it was launching a preview of its generative AI chatbot Grok, which is designed to rival ChatGPT and Google LLC’s Gemini models. At the time, xAI said Grok has been modeled on the Hitchhiker’s Guide to the Galaxy and that it is designed to respond to almost any kind of prompt, and also suggest questions to ask. Its responses generally contain a “bit of wit and [it] has a rebellious streak,” xAI’s team wrote at the time.
The AI startup said the following month that Grok was being made available to X Premium+ subscribers in the U.S. Later, Grok also came to users in Australia, Canada, India and around a dozen other countries.
Oracle Corp. founder Larry Ellison, who is a close friend of Musk, said last December that xAI had agreed a deal to train its AI models on Oracle’s cloud infrastructure.
Photo: Wikimedia Commons
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