Valor, a16z, and Sequoia Invest $6B in Elon Musk’s xAI

In one of the biggest transactions in the fiercely competitive early market, Elon Musk’s artificial intelligence company, xAI, announced today that it had raised $6 billion in a new investment round. With this money, he plans to aggressively take on competitors like OpenAI, Microsoft, and Google.

Investors in xAI’s Series B raising money include Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity, Prince Alwaleed Bin Talal, and Kingdom Holding, the business stated in a blog post.

The funding supports the April TechCrunch article stating that xAI was aiming to raise $6 billion. At the time, TechCrunch claimed, xAI was closing the financing that would have valued it at $18 billion. xAI, which emerged from social network X only a year ago, and whether or if X had made any investments as well.

Musk confirmed that the pre-money valuation of the funding round was $18 billion.

One of the most well-known and early entrepreneurs in the AI field is Elon Musk. He is the CEO of Tesla, the leading electric vehicle manufacturer with self-driving technology. In addition, he co-founded OpenAI, a firm that he has tens of millions of dollars invested in. Since then, Musk’s love for OpenAI has decreased. He sued Sam Altman, the company’s co-founder, and OpenAI in March, claiming that they had given up their mission statement and turned into a “closed-source de facto subsidiary” of Microsoft. Additionally, he charged Google with incorporating bias into its AI systems.

In November, Musk unveiled the Grok 1.0 model, a rival to ChatGPT, following the formation of xAI year. Subsequently, the business offered the model to Premium+ customers on X, who pay $16 per month, via a chatbot. The company made the updated Grok 1.5 model available in April and made the chatbot available to Premium customers on X. In addition, in April, the Musk-owned business unveiled Grok’s multimodal features. The Grok model was made available as open source earlier this year, but no training code was included.

According to the blog post, xAI intends to use the money from the latest funding round to develop and create cutting-edge infrastructure, launch its first line of goods, and accelerate the study and development of new technologies. It is probable that the organization will seek collaborations to present Grok to users outside of X.