Elon Musk Denies Funding Claims for xAI

Elon Musk has criticized a CNBC report stating that his company, xAI, raised $15 billion. He called the claim “false.”

According to the news outlet, xAI recently secured an additional $5 billion in a funding round that initially reported $10 billion two months earlier. The report cited unnamed sources.

CNBC previously indicated that the $10 billion round valued the company at about $200 billion. Musk had also mentioned earlier that this report wasn’t accurate.

In response to inquiries, xAI reportedly replied automatically, stating, “Legacy media is lying.”

At the moment, CNBC hasn’t responded to requests for comments about the situation.

Insiders suggest that the funds would be allocated towards developing graphics processing units for advanced language models.

Even as some investors express concerns about the inflated valuations surrounding AI stocks, major tech companies continue to heavily invest in AI infrastructure—recently resulting in a significant sell-off in stocks.

Musk’s startup, founded in July 2023, is in a race to establish large data centers to compete with other firms like OpenAI.

Interestingly, xAI has been concentrating on acquiring land in Memphis, Tennessee, to construct the planned Colossus supercomputer, which has sparked some controversy.

Environmental advocates have raised alarms over the use of natural gas-burning turbines related to this project, arguing they could worsen air quality.

Moreover, Musk’s Grok chatbot and Grokipedia, an AI-driven alternative to Wikipedia, have come under scrutiny. Some users critique them for perceived bias, while others assert they offer a more neutral perspective compared to traditional sources.

Recently, Musk has been looking to consolidate various business interests. In March, xAI acquired Musk’s social media platform, X, previously known as Twitter, which was valued at $33 billion.

Additionally, several new Tesla models have integrated xAI’s Grok chatbot into their infotainment systems. xAI has also acquired substantial quantities of Tesla’s battery storage systems to implement in its data centers.

During last week’s annual shareholder meeting, Tesla investors approved a massive $1 trillion compensation package for Musk—a record-breaking plan contingent on achieving ambitious performance targets over the next decade.

However, Tesla shareholders turned down a proposal that would have allowed the company to invest in xAI, indicating some reluctance about merging these two ventures further.