With the aim of reaching a $1 billion target, investors have reportedly committed $500 million to Elon Musk xAI, according to a Bloomberg report.The valuation that is being discussed is between $15 billion and $20 billion, though specifics may change in the coming weeks.
xAI, which was founded by Musk as an OpenAI substitute last year, has experienced success with its main offering, the chatbot that uses artificial intelligence named Grok. Built on Musk’s social media network, X posts, Grok distinguishes itself from other chatbots by utilizing recent data when replying to users.
Investors in both businesses are probably going to be similar, since prominent backers of Musk’s proposed $44 billion acquisition of Twitter include Larry Ellison, Sequoia Capital, Andreessen Horowitz, and Fidelity.
Musk declared in November that a quarter of xAI shares would be purchased by investors. This suggests that investors are being asked to contribute a minimum of 25% of their total investment to the X platform.Finalizing terms with investors is anticipated in the next two weeks, with discussions including the potential acquisition of computing power along with xAI shares, catering to investment firms requiring intensive data processing for AI product development.
Despite Bloomberg’s report indicating $500 million commitments, Musk refuted the claims, terming it “fake news” on his platform, X.In December, Musk had declared that xAI was not in the process of raising money, which went against the company’s filing with the U.S. Securities Commission for a $1 billion share sale fundraising.
As Elon Musk navigates the evolving landscape of artificial intelligence with xAI, the recent developments and reported funding commitments showcase the dynamic nature of the tech industry. While discussions about valuations and investments continue, the potential impact of xAI and its unique offerings, such as the Grok chatbot, underscores Musk’s commitment to pushing the boundaries of AI applications. As final touches are put on the terms in the coming weeks, the intersection of technology, investments, and innovation in the realm of artificial intelligence remains a focal point of interest, shaping the trajectory of xAI’s journey in this rapidly advancing field.
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