Elon Musk’s xAI seeks to raise $6bn, targeting a $20bn valuation in rivalry with OpenAI


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Updated January 26, 2024:

According to the Financial Times, xAI is in talks to raise $6 billion from global investors, including family offices in Hong Kong. The goal is to compete with Microsoft and OpenAI. Three FT sources familiar with the matter report that negotiations are ongoing and that terms could change.

Musk is reportedly seeking a valuation of $20 billion and is also approaching sovereign wealth funds in the Middle East, as well as investors in Japan and South Korea. Morgan Stanley is said to be coordinating the fundraising. The bank declined to comment.

OpenAI has raised about $13 billion from Microsoft alone and is reportedly preparing a new mega-round. The second major LLM startup, Anthropic, has raised about $6 billion from Google and Amazon.

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Original article dated January 20, 2024:

Elon Musk’s AI startup, xAI, has reportedly raised $500 million and is aiming for $1 billion

Elon Musk’s AI startup xAI has secured $500 million in investor commitments toward its $1 billion funding goal, with a valuation between $15 billion and $20 billion being discussed, Bloomberg reports.

Investors in X, including Larry Ellison, Sequoia Capital, Andreessen Horowitz, Fidelity Management & Research Co. and Saudi Prince Alwaleed bin Talal, are expected to own 25% of xAI.

According to Bloomberg’s sources, this means that xAI will offer its equity investors in X the opportunity to invest in xAI at least 25% of the amount they invested in X.

Some parties are considering acquiring computing power in addition to, or instead of, xAI shares. Final terms are expected to be worked out in the coming weeks.

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Musk says on X: “This is fake news from Bloomberg,” without specifying what’s fake.



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