Elon Musk’s xAI Raises $500 Million: Report

The AI start-up is eyeing an up to $20 billion valuation, according to Bloomberg.

Elon Musk’s artificial intelligence venture xAI has secured $500 million in new funding, Bloomberg reported on Friday, amid an apparent showdown over the technology's place at his electric car company.

In December, Musk’s AI startup notified the U.S. Securities and Exchange Commission of its intent to raise $1 billion in funding through an equity offering. Documents showed that Musk had already secured over $134 million at the time.
The Bloomberg source said that xAI is eyeing a $15 to $20 billion valuation, but the terms could change over time. Musk has not yet commented on the raise.

Since the launch of OpenAI’s GPT-4 last year, Musk has been in a race with the company he co-founded to bring the next generation of generative AI to market. Before Grok’s launch in November, Musk touted his AI model, first announced in July, as the best currently, with xAI claiming Grok will have "real-time knowledge of the world" thanks to being connected to Twitter.
"Tomorrow, [xAI] will release its first AI to a select group,” Musk wrote on Twitter. “In some important respects, it is the best that currently exists."
After Grok’s launch, Musk and OpenAI’s Sam Altman traded insults using their respected AI.
Musk, however, has cautioned that AI could threaten humanity by taking control of global computer and weapon systems. In a less dire prediction, Musk warned that artificial intelligence would eventually replace humans in the workforce.

“For the first time, we will have something that is smarter than the smartest human,” Musk said during the AI Safety Summit in Bletchley Park last fall. “It's hard to say exactly what that moment is, but there will come a point where no job is needed—you can have a job if you want to have a job for sort of personal satisfaction, but the AI will be able to do everything.”

Tesla Up 10% on Prediction Its AI Chips Will Outperform Nvidia's

Could the growth of artificial intelligence benefit Tesla, Elon Musk’s infamous automaker? Morgan Stanley analyst Adam Jonas seems to think so. In a newly published research note, the auto-industry researcher boosted Tesla’s stock to “overweight” (implying it will outperform competitors) and raised his price target from $250 to $400. The change spurred a 10% jump in TSLA—which trades on the Nasdaq—on Monday up to $271. The note highlighted Dojo—Tesla’s custom supercomputing system for training .

On Tuesday, the New York Times reported that Musk, also the CEO of Tesla, threatened to take his artificial intelligence designs out of the company if the board refused to give him more than $80 billion in shares.
Musk’s threat of pulling AI out of Tesla is the latest conflict Musk has been involved in. During a New York Times DealBook Summit interview in November with the Times’ Andrew Ross Sorkin, the world’s richest person told investors to “go fuck yourself” after several advertisers threatened to leave Twitter after Musk said what many called antisemitic remarks on the platform.
"If somebody's gonna try to blackmail me with advertising, blackmail me with money? Go fuck yourself," he said. "Go. Fuck. Yourself. Is that clear? I hope it is.”
Of course, cryptocurrency degens turned the moment into a memecoin.
Edited by Ryan Ozawa.

Elon Musk’s artificial intelligence venture xAI has secured $500 million in new funding, Bloomberg reported on Friday, amid an apparent showdown over the technology's place at his electric car company.
In December, Musk’s AI startup notified the U.S. Securities and Exchange Commission of its intent to raise $1 billion in funding through an equity offering. Documents showed that Musk had already secured over $134 million at the time.

The Bloomberg source said that xAI is eyeing a $15 to $20 billion valuation, but the terms could change over time. Musk has not yet commented on the raise.

Since the launch of OpenAI’s GPT-4 last year, Musk has been in a race with the company he co-founded to bring the next generation of generative AI to market. Before Grok’s launch in November, Musk touted his AI model, first announced in July, as the best currently, with xAI claiming Grok will have "real-time knowledge of the world" thanks to being connected to Twitter.

"Tomorrow, [xAI] will release its first AI to a select group,” Musk wrote on Twitter. “In some important respects, it is the best that currently exists."

After Grok’s launch, Musk and OpenAI’s Sam Altman traded insults using their respected AI.

Musk, however, has cautioned that AI could threaten humanity by taking control of global computer and weapon systems. In a less dire prediction, Musk warned that artificial intelligence would eventually replace humans in the workforce.

“For the first time, we will have something that is smarter than the smartest human,” Musk said during the AI Safety Summit in Bletchley Park last fall. “It's hard to say exactly what that moment is, but there will come a point where no job is needed—you can have a job if you want to have a job for sort of personal satisfaction, but the AI will be able to do everything.”