Elon Musk’s AI start-up, xAI, has successfully garnered €5.5 billion ($6 billion) in funding, marking a significant step in its competition with Musk’s previous associates at OpenAI. This Series B funding round, revealed on May 26, indicates one of the substantial investments in the budding domain of AI tool development and comes not long after xAI’s first public appearance.
Being a staunch early endorser of AI, Musk previously supported OpenAI before launching ChatGPT towards the end of 2022. However, he later rescinded his support due to the potential threats posed by the advanced technology, joining a broad consortium of industry magnates who were advocating for a halt in AI development last year.
Musk then initiated a competitor to OpenAI’s ChatGPT, dubbed Grok, in November. Grok, the most apparent outcome of xAI’s endeavours thus far, was designed to cooperate and was thus implemented into X.com, the platform previously called Twitter. xAI, managed by veterans from DeepMind (a subsidiary of Alphabet), Microsoft and Tesla, aims to employ the accrued funding to launch its inaugural products, forge avant-garde infrastructure and expedite the progression of future technologies, as stated in the company’s blog.
Musk communicated over X that the company’s pre-investment valuation stood at $18 billion. Prestigious venture-capital firms such as Sequoia Capital and Andreessen Horowitz were among the backers of this fundraising round, one of the most sizable in the sector. In comparison, Microsoft has invested an estimated $13 billion in OpenAI, whereas Amazon.com Inc. has channelled around $4 billion into Anthropic.