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Elon Musk-founded artificial intelligence startup xAI has raised $6 billion in a Series B funding round. xAI aims to develop advanced AI technologies.
Musk is well-known for his early involvement and support in the AI sector, notably as a co-founder of OpenAI. However, his focus shifted to creating xAI to address potential dangers he perceives in the field.
Who invested in xAI?
The Series B funding round saw participation from prominent investors such as Andreessen Horowitz, Sequoia Capital, Valor Equity Partners, Vy Capital, Fidelity Management & Research Company, and Prince Alwaleed Bin Talal’s Kingdom Holding.
The diverse group of backers signals strong confidence in xAI's potential to compete in the AI market.
According to Musk, the pre-money valuation of the company was $18 billion, which rose to $24 billion post-investment.
"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 wrote in a post on X.
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 https://t.co/jWEGDDnVk1
— Elon Musk (@elonmusk) May 27, 2024
What is the purpose of fundraising?
xAI plans to utilize the $6 billion to bring its first products to market, develop advanced infrastructure, and accelerate research and development of future technologies.
The startup has already made notable progress with its Grok AI service, starting with the release of Grok-1 on the Musk-owned social media platform X (formerly Twitter) in November 2023.
This was followed by Grok-1.5, featuring long-context capability, and Grok-1.5V, with image understanding capacity. Additionally, xAI has open-sourced Grok-1 to facilitate advancements in various applications and optimizations.
Rising competition
The substantial investment in xAI highlights the intensifying competition in the AI space, with major players like OpenAI, backed by Microsoft, and Alphabet's Google leading the charge.
These companies are driving significant innovation and investments in generative AI technologies.
xAI's entry into this field is notable, as it positions itself as a challenger aiming to develop "truthful" AI systems, despite some criticisms regarding its Grok AI's news summary feature, which has been reported to generate misleading information.
What's next for xAI?
While xAI has not disclosed its exact valuation following the latest funding round, reports suggest it could be between $18 billion and $24 billion.
The company has hinted at several upcoming technology updates and product announcements.
Musk emphasized this in his recent post on X, stating, "There will be more to announce in the coming weeks."
There will be more to announce in the coming weeks
— Elon Musk (@elonmusk) May 27, 2024