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xAI, Elon Musk’s OpenAI rival, is closing on $6B in funding and X, his social network, is already one of its shareholders | TechCrunch

Apr 26, 2024 - techcrunch.com
Elon Musk's AI venture, xAI, is reportedly raising $6 billion at a pre-money valuation of $18 billion, according to an anonymous source. The deal, which would give investors a quarter of the company, is expected to close in the coming weeks. This marks a significant increase from the initial $3 billion at a $15 billion valuation that was initially proposed. Sequoia Capital and Future Ventures, co-founded by Musk's friend Steve Jurvetson, are among the investors participating in the round.

The goal of xAI is to connect the digital and physical worlds by using training data from Musk's other companies, including Tesla, SpaceX, Boring Company, and Neuralink. Musk's social media platform, X, has already incorporated xAI's chatbot, Grok, as a paid add-on. Musk plans to feed Grok with data from his other companies, starting with self-driving cars and potentially extending to Tesla's humanoid robot, Optimus. The success of xAI could pose a challenge to OpenAI, a company Musk co-founded and later left due to disagreements over its direction.

Key takeaways:

  • Elon Musk's AI company, xAI, is raising $6 billion at a pre-money valuation of $18 billion, with investors including Sequoia Capital and Future Ventures.
  • The company's ambition is to connect the digital and physical worlds by pulling in training data from each of Musk's companies, including Tesla, SpaceX, Boring Company, and Neuralink.
  • xAI's chatbot, Grok, has been incorporated into Musk's social media platform, X, as a paid add-on and is expected to be fed data from Musk's other companies to help it master the physical world.
  • Musk has been targeting OpenAI, a company he co-founded and left in 2018, and is now suing. He recently open sourced the architecture of xAI's earliest chatbot “Grok-1” as part of his ongoing campaign to distinguish his efforts from OpenAI.
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