Elon Musk’s XAI Startup Seeking To Raise $1 Billionthedigitalchaps



Elon Musk’s AI startup xAI indicated in a regulatory filing Tuesday it is seeking to sell $1 billion in equity —after already raising over $134 million during its four months of operation.

Key Facts

The Securities and Exchange Commission filing indicated xAI is seeking to sell an additional $865.3 million to investors, with a minimum investment of $2 million required to take a stake in the company.

Last month, xAI released Grok—a chatbot powered by a large language model the company claims has “real-time knowledge of the world” from access to X, formerly known as Twitter, which Musk purchased for $44 billion in 2022.

Grok was designed to “maximally benefit all of humanity,” xAI said, and has been rolled out to select X users.

Key Background

Musk was a co-founder of OpenAI, the company that released ChatGPT in 2022. He left the board of directors in 2018 after clashing with CEO Sam Altman, and a failed bid to take over the company that was then operated as a nonprofit. In the years since, Musk has criticized OpenAI and other competitors, accusing them of not taking the safety concerns of AI seriously, as well as for “censoring” the answers their programs give to sensitive questions. Musk founded xAI in July as a competitor to OpenAI and other companies backed by big tech firms, such as Google’s DeepMind. The new startup immediately attracted talent from competitors, including former DeepMind senior researcher Igor Babuschkin.


AI companies have attracted billions in funding over the past year after the success of ChatGPT. In September, Amazon invested $4 billion in startup Anthropic—a company founded by former OpenAI employees that has since released the AI assistant Claude. OpenAI is also reportedly seeking a new valuation between $80 billion and $90 billion—making it one of the highest valued startups in the world.

Further Reading

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