Elon Musk‘s xAI Corp. is on the brink of concluding a funding round in June that could potentially value the company at over $24 billion, including its latest cash infusion.
What Happened: The funding aspirations of xAI have significantly expanded since January, when the company was reportedly seeking to raise $1 billion, reported Bloomberg, citing a source.
The startup, which is a competitor to OpenAI, has been presented to various Silicon Valley investors based on Musk’s track record at Tesla Inc. and SpaceX.
The company has been in discussions for a financing round of approximately $6 billion, but the finalization of the deal is still pending. The company is now seeking up to $6.5 billion and aims to reach this target in the coming weeks.
The company’s pitch materials also highlighted that xAI and its chatbot, Grok, will be able to utilize high-quality data from X, Musk’s social platform. This access to data is crucial for building large language models, an area where xAI aims to compete with other well-funded businesses such as OpenAI.
The deal will give xAI a pre-money valuation of $18 billion, a metric that does not include the funds raised. Musk, in a remote interview at the Viva Technology conference in Paris, spoke about xAI’s goal of being “as truth-seeking as possible” and criticized other AI models developed by Alphabet Inc.‘s Google and OpenAI as “pandering” to political correctness.
Why It Matters: Musk’s xAI has been making significant strides in the AI space. Earlier this month, the company’s valuation was predicted to exceed $20 billion, which was already a substantial increase from initial expectations.
Musk has also been vocal about his ambitions for xAI, including its potential to be the new late-night comedian.
These developments come at a time when the importance of AI is being underscored, with experts predicting that companies not fully utilizing AI by 2030 will be out of business.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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