Billionaire Elon Musk's artificial intelligence (AI) startup xAI announced Sunday that the company raised $6 billion in Series B funding that lifts the company's valuation to $24 billion after the investment.
Among the investors in xAI's $6 billion Series B round were Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal and Kingdom Holding, according to the company.
Musk's xAI, which was publicly unveiled in July 2023, explained that it plans to use the cash infusion to further develop products and bring them to market.
"xAI will continue on this steep trajectory of progress over the coming months, with multiple exciting technology updates and products soon to be announced," the company wrote. "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."
ELON MUSK TO MAKE GROK CHATBOT OPEN-SOURCE, TAKING SWIPE AT OPENAI
Musk wrote in a post on X that xAI had a pre-money valuation of $18 billion before it concluded the Series B funding round.
"There will be more to announce in the coming weeks," Musk added in a separate post.
The funding announcement comes after the company launched its Grok chatbot in November, which has since been incorporated into the X for users who purchase a subscription to the social media platform.
ELON MUSK DENIES AI STARTUP HAS RAISED $500M OF $1B GOAL
In December, xAI indicated in a regulatory filing with the Securities and Exchange Commission (SEC) that it intended to raise $1 billion in capital from equity investors. At the time, the company indicated it had sold about $134 million of that total.
On several occasions over the last year, Musk denied that xAI was raising capital. In response to a report from January by Bloomberg News indicating that xAI was discussing a valuation of $15 billion to $20 billion, Musk said it was "simply not accurate," and also sought to tamp down reports about the SEC fundraising filing by saying, "We are not raising money right now."
WHAT IS ARTIFICIAL INTELLIGENCE (AI)?
xAI's announcement also mentioned that the company is "hiring for numerous roles and seeks talented individuals ready to join a small team focused on making a meaningful impact on the future of humanity."
"Join xAI if you believe in our mission of understanding the universe, which requires maximally rigorous pursuit of the truth, without regard to popularity or political correctness," Musk added on X.
Musk launched xAI to compete with OpenAI, a company he co-founded before departing its board of directors in 2018 based on his belief that OpenAI had fallen behind Google in the AI race and that there may be a conflict of interest due to his pursuit of AI initiatives at Tesla.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Earlier this year, he filed a lawsuit arguing OpenAI breached its founding agreement to develop AI for the benefit of humanity rather than for profit because of the company's partnership with Microsoft.
OpenAI pushed back on the lawsuit, saying Musk left the board because he wanted a controlling equity interest, to be CEO and to have control over the board. An open letter from Altman and fellow OpenAI co-founders Greg Brockman and Ilya Sutskever discussed those dynamics with Musk and noted his suggestion that OpenAI merge with Tesla.
