Elon Musk’s xAI Raises $6 Billion To Accelerate AI Race Against OpenAI

Elon Musk’s AI startup, xAI, announced early Monday morning that it had raised $6 billion from investors in a Series B fundraising round. This funding will accelerate its artificial intelligence development as the AI tech war with OpenAI intensifies.

Some key investors were Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal, and Kingdom Holding.

Musk wrote on X that the pre-money valuation was $18 billion. 

Pre-money valuation was $18B

— Elon Musk (@elonmusk) May 27, 2024

xAI listed its accomplishments over the past year:

xAI has made significant strides over the past year. From the announcement of the company in July 2023, to the release of Grok-1 on X in November, to the recent announcements of the improved Grok-1.5 model with long context capability, to Grok-1.5V with image understanding, xAI’s model capabilities have improved rapidly. With the open-source release of Grok-1, xAI has opened doors for advancements in various applications, optimizations, and extensions of the model.

Then it outlined what’s coming down the pipe:

xAI will continue on this steep trajectory of progress over the coming months, with multiple exciting technology updates and products soon to be announced. The funds from the round will be used to take xAI’s first products to market, build advanced infrastructure, and accelerate the research and development of future technologies.

Musk added on X that, in terms of future announcements, “There will be more to announce in the coming weeks.” 

There will be more to announce in the coming weeks

— Elon Musk (@elonmusk) May 27, 2024

The fundraising shows that the AI arms race between Musk and ChatGPT creator OpenAI, as well as with others, is heating up. Grok is different from competitors, like ChatGPT4, because it’s trained on X posts and considered by some to be ‘anti-woke.’