Elon Musk’s xAI aims to raise $6 billion in fundraising round

xAI, Elon Musk’s challenger to OpenAI, is amid a substantial fundraising round. According to sources familiar with the deal, it aims to raise $6 billion on an $18 billion valuation. Originally planned at $3 billion on a $15 billion valuation, the increase reflects heightened investor interest in the venture.

Investors in this round include notable names like Sequoia Capital, Future Ventures, and likely, Valor Equity Partners and Gigafund, all deeply connected to Musk’s network. The fundraising process, overseen by Jared Birchall from Musk’s family office, reportedly involved direct discussions with Musk and his engineers, showcasing the company’s intimate approach.

xAI’s vision encompasses bridging the digital and physical realms by leveraging data from Musk’s companies, including Tesla, SpaceX, Boring Company, and Neuralink. Musk’s overarching plan involves deploying AI-driven solutions, like the chatbot Grok, across his ecosystem, with future applications potentially extending to Tesla’s humanoid robot, Optimus.

Why does it matter?

For Musk, xAI’s success holds implications beyond technological advancement. With X, Musk’s troubled social media platform, holding a stake in xAI, the former benefits from the latter’s growth. Meanwhile, Musk’s ongoing feud with OpenAI, the AI giant he co-founded but later distanced himself from, adds another layer of complexity to the evolving landscape of AI.