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Eye On AI: xAI’s Backers Have A Lot Of Other Bets Besides Musk’s LLM

May 30, 2024 - news.crunchbase.com
Generative AI startups are seeing a surge in billion-dollar funding rounds, with Scale AI raising $1 billion at a $13.8 billion valuation and Elon Musk's xAI announcing a $6 billion round at a $24 billion valuation. The xAI round included investment from Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Co., Prince Alwaleed Bin Talal and Kingdom Holding Co., making it the second-most-valuable generative AI company in the world behind OpenAI. Sequoia and Andreessen Horowitz also participated in OpenAI’s $300 million share sale at a valuation between $27 billion and $29 billion. Andreessen also led a Series A worth about $418 million for Paris-based Mistral AI.

In other AI investment news, Fidelity Management & Research Co. has led a $642 million minority investment in AI cloud infrastructure company CoreWeave at a $7 billion valuation, participated in a $500 million-plus Series I for AI-enhanced data analytics company Databricks at a $43 billion valuation, and led a $150 million Series D for chip startup Astera Labs at nearly $3.2 billion. A New York-based startup, ThinkLabs AI, also raised a $5 million seed round to enhance grid planning through intelligent automation and AI.

Key takeaways:

  • Last week, Scale AI raised $1 billion in a round led by Accel, valuing the data labeling and evaluation startup at $13.8 billion. This week, Elon Musk’s generative AI startup, xAI, announced its $6 billion round that values the company at $24 billion.
  • The xAI round makes Musk’s startup the second-most-valuable generative AI company in the world behind only competitor OpenAI.
  • Sequoia Capital and Andreessen Horowitz are among the investors who have invested in multiple generative AI startups, including OpenAI and xAI.
  • Fidelity Management & Research Co. has led several large investment rounds in AI companies, including a $642 million minority investment in AI cloud infrastructure company CoreWeave, a $500 million-plus Series I for AI-enhanced data analytics company Databricks, and a $150 million Series D for chip startup Astera Labs.
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