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Musk’s xAI raises US$6 bil in bid to challenge OpenAI

Bloomberg
Bloomberg • 2 min read
Musk’s xAI raises US$6 bil in bid to challenge OpenAI
Marquee venture capital names including Sequoia Capital and Andreessen Horowitz backed the fundraising, which is one of the largest so far in the industry. Photo: Bloomberg
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Elon Musk’s artificial intelligence startup xAI has raised US$6 billion ($8.10 billion) to accelerate its challenge to his former allies at OpenAI.

The Series B round, announced in a blog post on May 26, comes less than a year after xAI’s debut and marks one of the bigger investments in the nascent field of developing AI tools.

Musk had been an early supporter of artificial intelligence, backing OpenAI before it introduced ChatGPT in late 2022.

He later withdrew his support from the venture and has advocated caution because of the technology’s potential dangers. He was among a large group of industry leaders urging a pause to AI development last year.

Musk launched a rival to OpenAI’s ChatGPT in November 2023, called Grok, which was trained on and integrated into X.com, the social network formerly known as Twitter.

That has so far been the most visible product of xAI’s work, which is led by executives with prior experience at Alphabet Inc.’s DeepMind, Microsoft and Tesla.

See also: Valuations of AI stocks high? Market thinks no: T Rowe Price

The company intends to use the funds to bring its first products to market, build advanced infrastructure and accelerate the development of future technologies, it said in the blog.

Its pre-money valuation was US$18 billion, Musk said in a post on X. Marquee venture capital names including Sequoia Capital and Andreessen Horowitz backed the fundraising, which is one of the largest so far in the industry.

Microsoft Corp. has invested about US$13 billion in OpenAI, while Amazon.com Inc. put about US$4 billion into Anthropic.

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