Elon Musk artificial intelligence start-up xAI set to conclude funding round valuing it at $24bn in coming weeks amidst heavy competition
Elon Musk artificial intelligence start-up xAI has raised funds from major venture capital firms Lightspeed Venture Partners, Andreessen Horowitz, Sequoia Capital and Tribe Capital in a round that values the company at $24 billion (£18.8bn) including the new funds, the Financial Times reported.
The firms have joined an ongoing funding round, scheduled to complete in June, in which xAI is seeking roughly $6bn in negotiations that began last year, according to a separate report by Bloomberg.
The start-up is seeking as much as $6.5bn in the deal and is seeking to get closer to that figure over the next few weeks, Bloomberg said.
The deal would value xAI at about $18bn in pre-money figures that do not include the new funding.
‘Truth-seeking’
The start-up, which is playing catch-up to tech giants such as Google and well-funded start-ups such as Microsoft-backed OpenAI, has been marketed to investors with a pitch deck touting Musk’s success with Tesla and SpaceX, reports have previously said.
The pitch argues xAI will have advantages over rivals through its connections to other Musk companies, including high-quality data from X, formerly Twitter, for use in training its large language model (LLM).
Musk has said he wants xAI, whose first product is the Grok chatbot, to be as “truth-seeking” as possible and has criticised competitors for being too politically correct.
Speaking via a remote interview at the Viva Technology conference in Paris last week, he said another goal for xAI was to “try to be the funniest AI”.
When xAI was first reported to be seeking new funding late last year its target figure was only $1bn.
Investor rush
AI start-ups raised $19.15bn in venture capital funding in the first quarter, up from $16.36bn in the same quarter a year earlier, according to PitchBook, amidst a rush of investor enthusiasm for the technology following the launch of OpenAI’s ChatGPT in late 2022.
When xAI was first reported to be seeking funding in January, Musk said in a post on X, “xAI is not raising capital and I have had no conversations with anyone in this regard.”
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