It is possible that Elon Musk’s xAI has received $24 billion in funding from Andreessen, Lightspeed, Sequoia
It is possible that Elon Musk’s xAI has received $24 billion in funding from Andreessen, Lightspeed, Sequoia, and Tribe.
A person with knowledge of the negotiations claims that Elon Musk’s artificial intelligence business, X.AI Corp., is expected to close a funding round in June, which could put the company’s total valuation at over $24 billion, including the most recent investment round.
The company had originally planned to close a $6 billion funding round earlier this month. But the ultimate conclusion has been postponed, and the business is now looking to raise up to $6.5 billion. The person who wished to remain anonymous said that because the information is confidential, efforts will be made to move closer to that target over the following few weeks.
Major Silicon Valley venture capital firms, such as Lightspeed Venture Partners, Andreessen Horowitz, Sequoia Capital, and Tribe Capital, have shown a great deal of support for Elon Musk’s xAI.
Sources with knowledge of the negotiations claim that these investors have agreed to take part in xAI’s most recent funding round, in which Musk hopes to raise up to $6 billion. Musk is still a few hundred million dollars short of his goal, an investor in the round told the Financial Times.
Musk is pushing for funds in an effort to strengthen xAI’s standing in the cutthroat AI industry, where more sophisticated generative AI models have already been released by industry heavyweights OpenAI, Anthropic, and Google.
The success of xAI’s pitch to investors depends on its ability to take use of the connections he has made with other businesses that may be able to offer the firm technology, data, and early income.
The latest fundraising round would enable xAI to develop future versions of its Grok chatbot, with a “post-money” valuation of $24 billion. Before leaving OpenAI in 2018, Musk co-founded the business and had conflicts with Sam Altman, the CEO at the time, about the direction of the company’s research.
Musk then filed a lawsuit against OpenAI and Altman, claiming that the business had strayed from its initial goal. OpenAI called Musk’s lawsuit “frivolous.”
Musk has promised to be more open than his competitors in his quest for artificial general intelligence, slamming current models for what he considers to be overly political correctness. Although some investors are persuaded by Musk’s vision, they warn that xAI lags behind its rivals and would need significant infrastructure and chip investments to catch up.
Priority to purchase up to 25% of xAI shares was granted to investors such as Sequoia and Andreessen, who have previously supported Musk’s companies, including X and SpaceX. Furthermore, banks and other special purpose entities, including those with capital from outside the US, facilitated a large portion of the investment round.
The inclusivity of the fundraising process has drawn criticism, though, with some investors feeling left out if they have previously voiced worries about problems at Musk’s other businesses. Notwithstanding these reservations, investors around the world—including family offices, sovereign wealth funds, and regular investors in places like Hong Kong and the Middle East—continue to show a great deal of interest in xAI.
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