Elon Musk Aims to Raise $4 Billion for xAI, Challenging ChatGPT

Tesla's CEO Elon Musk is in the process of securing up to $4 billion in funding for his latest venture, xAI, an artificial intelligence (AI) startup.

The company, which debuted its open-source AI chatbot named Grok in November 2023, claims superior performance over competitors like OpenAI's ChatGPT.

Did you know?

Want to get smarter & wealthier with crypto?

Subscribe - We publish new crypto explainer videos every week!

What is Shiba Inu Coin? (Explained with Animations)

SUBSCRIBE

ON YOUTUBE

The funding pitch reportedly highlighted Musk's previous successes with companies like Tesla and his AI model's training on data from Musk's social media network, X (formerly Twitter).

Investors are invited to participate in the funding through special purpose vehicles (SPVs), a strategy that consolidates funds from various venture capitalists and private investors into one entity.

The goal is to secure between $3 billion and $4 billion, which could raise the company's value to $18 billion after the investment round. The company plans to raise the funds within the next two to three weeks "on a first come, first served basis."

Despite its high valuation, xAI remains a relatively small startup, employing only ten full-time engineers and operating between 5,000 and 10,000 GPUs.

Still, this funding round will not only finance innovation but also make a bold statement in a field crowded with strong competitors.

This interest in xAI highlights a broader trend of billions channeled into AI startups. Amazon has recently increased its investment to $4 billion and secured a minority stake in Anthropic, the developer of AI chatbot Claude.