Elon Musk’s artificial intelligence startup xAI, which created the insidious Grok chatbot, aims to raise billions of dollars in a private funding round in the coming weeks, valuing the company at $20 billion. The Post reported that this is a possibility.
The new funding, which comes as major rival Google grapples with its “woke” AI chatbot Gemini, is expected to close in mid-to-late March and close quickly. A person familiar with the matter told The Post. .
Mr. Musk is considering raising $1 billion to $3 billion in cash from outside investors, two people familiar with the matter said, with a potential valuation in the $10 billion to $20 billion range. The mercurial tech billionaire may also personally invest billions of dollars in startups, one of the sources said.
Previously could be equivalent to a range The Financial Times reportedannounced in January that Musk was in talks to raise up to $6 billion and had approached sovereign wealth funds and investors in Japan, South Korea and Hong Kong.
Other participants are expected to include a small group of investors handpicked by Musk, including a Middle East-based sovereign wealth fund and a group with previous ties to the eccentric billionaire. This includes a U.S.-based family office with a
A spokesperson for Musk declined to comment.
Despite signs of activity, Musk has repeatedly denied that xAI was raising money.
“xAI has not raised any funding and I have not spoken to anyone about this,” Musk said in response to a FT report earlier this year.
At the time of Musk’s denial, xAI had already disclosed its funding plans in regulatory filings that surfaced several weeks ago. xAI announced in December that it would raise at least $1 billion through an initial public offering.
Musk positions xAI as a direct competitor to Google and OpenAI, the creator of ChatGPT. In November, Musk posted his Grok criticism of the front-runner. “ChatGPT 4? It’s like ChatGPT Snore!” (In response, OpenAI CEO Sam Altman branded Grok what he called “creepy boomer humor.”)
xAI’s round is sizable for other startups, but its valuation is a fraction of that of OpenAI, which recently completed an employee stock sale that pushed its value to more than $80 billion. It will stay.
OpenAI has raised $11.3 billion from investors to date, according to Crunchbase, and ChatGPT has more than 100 million weekly active users as of last November, making it the clear frontrunner in the AI race. We have established our position as Recently, OpenAI announced Sora, a tool that creates videos based on a user’s text-based prompts.
In comparison, Musk has yet to articulate a clear product lineup for xAI beyond Grok. Advertised as “TruthGPT” This will counter the left-leaning bias seen in other AI chatbots. xAI released Grok last year and it is now available to paid X subscribers.
Elsewhere, OpenAI CEO Sam Altman has raised trillions of dollars from investors as part of a hugely ambitious plan to jump-start production of the valuable computer chips needed to power AI. It is reported that they are trying to procure it.
Musk’s ownership of Company X may provide a partial explanation for the limited scope of the funding round. Through the social media giant, xAI already has access to its own hardware infrastructure as well as vast troves of data to train its AI models.
Given Google’s recent woes, the timing may be ripe for xAI’s funding. Google was forced to disable the image creation tools in its Gemini chatbot after it started spewing out historically and factually inaccurate “diverse” photos, including of black Vikings and female NHL players.
Gemini’s strange behavior was widely ridiculed on social media, with critics citing it as a clear sign of political bias in the chatbot’s training. Mr. Musk personally declared that the “Wake Mind Virus is destroying Western Civilization.”
