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Musk's xAI raising war chest to take on OpenAI: report

Jan 26, 2024 - businessinsider.com
Elon Musk's AI startup, xAI, is reportedly in talks to raise up to $6 billion in funding at a proposed valuation of $20 billion, according to the Financial Times. The report suggests that the company is in discussions with investors in Hong Kong and the Middle East, with Morgan Stanley leading the fundraising. This comes a week after Bloomberg reported that xAI had secured $500 million towards a $1 billion goal, a claim Musk denied on social media.

Musk, who initially co-founded OpenAI, has positioned xAI as a competitor to OpenAI. He launched xAI in 2023, releasing its Grok chatbot the same year. The news of xAI's fundraising efforts could indicate Musk's commitment to building AI products outside of Tesla, following his ultimatum to Tesla's board for 25% voting control or he would cease AI development at the electric car company.

Key takeaways:

  • Elon Musk's AI startup, xAI, is reportedly in talks to raise up to $6 billion in funding at a proposed valuation of $20 billion.
  • The company is in discussions with investors in Hong Kong and the Middle East, with Morgan Stanley reportedly leading the fundraising.
  • Last week, Musk denied a report that xAI had raised $500 million toward a $1 billion goal, calling it 'fake news'.
  • Musk has positioned xAI as an alternative to OpenAI, a company he helped found but left in 2018.
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