Following a significant fundraising event, Elon Musk’s xAI soars to a valuation of $24 billion

Elon Musk’s artificial intelligence company xAI announced this week that it raised $6 billion in its latest round of fundraising as the new company looks to gain ground on OpenAI.

The company, which was created in July 2023, announced in a blog post: “Our Series B funding round of $6 billion with participation from key investors including Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal and Kingdom Holding, amongst others.”

In less than a year, the company already rolled out its own AI chatbot, Grok, to compete with OpenAI’s ChatGPT. Grok, which is only available on Musk’s social media platform X, has already seen the release of two more sophisticated models — Grok 1.5 and later Grok 1.5V with image understanding, the company said.

“The funds from the round will be used to take xAI’s first products to market, build advanced infrastructure, and accelerate the research and development of future technologies,” the company said. “xAI is primarily focused on the development of advanced AI systems that are truthful, competent, and maximally beneficial for all of humanity. The company’s mission is to understand the true nature of the universe.”

The Wall Street Journal reported that with the latest infusion of cash into the company, it is now worth $24 billion, making it the second most valuable AI company in the world behind OpenAI, which was founded in 2015 and is worth an estimated $80 billion.

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The $6 billion haul was double the number that Musk’s team was aiming for in its latest round of fundraising.

Musk has personally invested $750 million in the company while X has contributed $250 million, the report said. Musk previously said that outsiders investors would own 25% of the company.

One advantage that xAI has over its competitors is access to Musk’s other companies that it can use to collect data, including X, Tesla, and SpaceX.

“The two sources of unlimited data are synthetic data and real world video,” Musk said last month. “Tesla has a pretty big advantage in real-world video.”

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