Elon Musk’s artificial intelligence startup xAI is reportedly negotiating a funding round that would value the company at $40 billion.
The company, founded last year by the Tesla and SpaceX mogul, was last valued at $24 billion just five months ago after a $6 billion funding round, which Musk’s team This was more than double the original goal set.
Musk is aiming to raise billions of dollars in this latest round of funding for xAI, people familiar with the matter told The Wall Street Journal.
Elon Musk’s artificial intelligence startup xAI is reportedly negotiating a funding round that would value the company at $40 billion. Reuters
Negotiations are still in the early stages.
The cash raised will add to the company’s valuation of $40 billion.
Mr. Musk did not respond to requests for comment.
Silicon Valley AI startups aim to gain an edge in the AI race by raising billions of dollars to fund expensive technological advances.
Earlier this month, OpenAI, the company behind ChatGPT, raised $6.6 billion at a valuation of $157 billion. This is one of the largest private financing rounds in U.S. history.
According to the magazine, AI startup Perplexity is in talks to raise funding that would more than double its valuation to $8 billion.
Mainstream tech giants like Google’s parent company Alphabet and Mark Zuckerberg’s Meta are betting big on artificial intelligence and funneling the profits into new projects like Alphabet’s Gemini bot.
According to The Information, Meta is reportedly working on developing its own AI-powered search engine.
“When you train a frontier model, it takes a tremendous amount of computing,” Musk said in a video conference Tuesday.
Musk, the world’s richest man with a net worth of $269.3 billion, according to Forbes, has been involved in artificial intelligence for years.
He co-founded OpenAI in 2015 and left the company in 2018.
According to the Wall Street Journal, xAI aims to raise billions of dollars in this round of funding. Reuters
When OpenAI achieved great success with its ChatGPT chatbot, Musk created xAI and has been trying to take the lead in the technology race ever since.
He sued OpenAI twice this year, claiming he was manipulated into thinking the company, in which he invested tens of millions of dollars, was a nonprofit organization.
Meanwhile, xAI has built what it claims is the world’s largest data center in Memphis, Tennessee.
The startup is training a new version of Grok, an AI chatbot. Grok is currently only available on Musk’s social media platform X (formerly known as Twitter).
xAI plans to double the number of graphics processing units (GPUs) in its data centers from 100,000 to 200,000, Musk said Monday.
Nvidia CEO Jensen Huang praised xAI’s massive data center as “arguably the fastest supercomputer on the planet.”
But Musk’s startup (which released a chatbot just four months after it was founded) is still trailing OpenAI and Google, which have been working on xAI for years.
Tesla shareholders have sued Musk, accusing him of sharing Tesla resources with xAI, an artificial intelligence startup. Steven Yang
And the company’s only source of revenue appeared to be its X Premium subscription, which includes Grok.
It’s unclear how lucrative premium subscriptions will be for xAI.
As of last spring, the platform had 640,000 X Premium subscribers out of more than 400 million monthly active users, according to Statista.
Last week, xAI released tools that developers can use to build applications using Grok, adding a new revenue stream.
Mr. Musk has leveraged the resources of other companies to help his company grow.
xAI hired employees from Tesla, and Musk repurposed thousands of Nvidia GPUs from the EV maker to the AI startup.
The magazine said the AI startup is discussing a deal in which it would receive a cut of Tesla’s revenue by giving it access to the company’s technology.
Musk said during Tesla’s earnings call last week that xAI has “helped Tesla AI many times in terms of scaling up and things like that.”
Tesla shareholders sued Musk to halt shared resources.
