Elon Musk’s AI Startup xAI Raises $6 Billion in Bid to Challenge OpenAI

The Series B round, announced in a blog post on May 26, comes less than a year after xAI’s debut.

By Vlad Savov, Bloomberg | Updated: 27 May 2024 15:00 IST

Elon Musk’s AI Startup xAI Raises $6 Billion in Bid to Challenge OpenAI

Photo Credit: Bloomberg

Musk launched Grok, a rival to OpenAI’s ChatGPT, in November 2023

Highlights

Elon Musk was an early backer of OpenAI
xAI's Grok chatbot was trained on and integrated into X.com
xAI intends to use the funds to bring its first products to market

Elon Musk's artificial intelligence startup xAI has raised $6 billion (roughly Rs. 49,857 crore) 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.

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Musk launched a rival to OpenAI's ChatGPT in November, 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's DeepMind, Microsoft and Tesla.

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 $18 billion (roughly Rs. 1,49,571 crore), 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.

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Microsoft has invested about $13 billion (roughly Rs. 1,08,024 crore) in OpenAI, while Amazon.com put about $4 billion (roughly Rs. 33,238 crore) into Anthropic.

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