The AI start-up of Tesla CEO Elon Musk, xAI, is looking for new funding with a valuation of around $40 billion. However, the funding round is not finalised and is still in the initial stage.
This was first reported by the Wall Street Journal. This comes after the company recently received a fundraise of $6 billion in a Series B round. The company said in a statement that the funding saw participation from several key investors, including Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal, Kingdom Holding, and others.
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The funds raised were used by the company to advance its infrastructure, develop future technologies, accelerate research and development, and also take its products to market. During the last fundraise, the valuation of the company was around $24 billion. Post the fundraise in May, the company said in a statement, “xAI will continue on this steep trajectory of progress over the coming months, with multiple exciting technology updates and products soon to be announced.”
Elon Musk also reportedly mentioned recently that his aim is to increase the computing capacity of xAI. As per Bloomberg, he said, “We already have with xAI the most powerful training cluster in the world, and we are about to double it.”
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To give a brief overview, xAI, which was started in July 2023, aims to develop advancements in AI systems that “are truthful, competent, and maximally beneficial for all of humanity." Additionally, the company has mentioned that its aim is to understand the nature of the universe. One of the raw base models, Grok-1, was launched by the company in March this year. “Grok-1 is a 314 billion parameter Mixture-of-Experts model trained from scratch by xAI,” the company said in a blog post.
The news about xAI’s fundraise is coming at a time when competition has been increasing in the AI sector. xAI's rival OpenAI raised $6.6 billion in funding in October this year. The investment was from key players such as Microsoft, Nvidia, Thrive Capital, and Khosla Ventures. The valuation for the company during the fundraise was $157 billion. Media reports claim that OpenAI asked its investors not to back its competitors, including xAI.
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