Billionaire Elon Musk was a key figure in the artificial intelligence sector, originally a part of the OpenAI team.
Musk launched his own artificial intelligence company in early 2023, which is now reportedly looking to raise funds at a large valuation.
What Happened: Musk launched xAI as a new company to expand his artificial intelligence efforts. At the time of launch, the company said it was seeking to "understand the true nature of the universe."
Consisting of team members who previously worked at organizations like OpenAI, Google Research, Microsoft Research and DeepMind, xAI today houses several artificial intelligence projects including Grok.
According to a new report from the Financial Times, xAI is in talks to raise $6 billion in a move that could value the company at $20 billion. Sources say the Musk-founded company is looking at global investors for the funding, including those from Hong Kong and the Middle East.
The report said Morgan Stanley, who helped finance Musk's acquisition of Twitter, now known as X, is helping with the fundraising.
Musk has previously shot down rumors of funding for his artificial intelligence unit, calling several reports "fake news." So far, no formal announcement of funding has been made.
OpenAI raised $10 billion in new funding from Microsoft Corporation MSFT in 2023. Reports in December said OpenAI was looking at additional funding, which could value the company at $100 billion.
Other artificial intelligence companies like Anthropic and Cohere have attracted billions of dollars in investments from top technology companies in the race for dominance in the AI sector.
Related Link: Musk’s X.ai Takes Over AI.com: A New Chapter In The Battle With OpenAI And The AI Industry
Why It's Important: The Financial Times notes that receiving investment for the artificial intelligence company from foreign investors, particularly those in Hong Kong, could be highly scrutinized given the current geopolitical climate. The Biden administration has been working on new rules for artificial intelligence, and previously banned some investments in Chinese AI.
Grok was launched in December 2023 and the chatbot is being used by users on social media platform X today. The chatbot is said to provide more relevant and recent data than competitors like ChatGPT.
The report of the potential funding raise for xAI comes as Musk has expressed his desire to increase his ownership in Tesla Inc TSLA to 25% to integrate more artificial intelligence initiatives.
With ownership stakes in Tesla, Twitter, SpaceX and more, investors in those companies all want a piece of Musk's AI efforts, including a stake in xAI.
The funding raise could also increase Musk's wealth, which has dropped in 2024. Musk is still the richest person in the world, but his wealth has dropped $30.9 billion in 2024, according to Bloomberg. Worth an estimated $198 billion, Musk saw his wealth fall Thursday with a drop in the share price of Tesla.
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
