xAI, a competitor to OpenAI backed by Elon Musk, is in the final stages of raising $6 billion in funding, valuing the company at $18 billion. According to sources close to the deal, investors are expected to own a quarter of the company once the deal is finalized in the coming weeks.
The deal terms for xAI have undergone adjustments, reflecting the high demand from investors. Initially planned at $3 billion with a $15 billion valuation, the figures were quickly updated to $6 billion on an $18 billion valuation.
One insider revealed, "We all received an email that basically said, 'It’s now $6B on $18B, and don’t complain because a lot of other people want in.'"
Leading venture capital firms like Sequoia Capital and Future Ventures, co-founded by Musk's friend Steve Jurvetson, are participating in the funding round. Other notable participants include Valor Equity Partners and Gigafund, both with close ties to Musk and his ventures.
Elon Musk aims to integrate xAI's technology across his various companies, including Tesla, SpaceX, Boring Company, and Neuralink. By leveraging data from these ventures, xAI seeks to bridge the gap between the digital and physical worlds.
Grok, xAI's chatbot, has already been integrated into Musk's social media platform, X, as a paid add-on. This integration is just one aspect of Musk's broader vision to create a seamless interaction between digital platforms and physical operations.
Elon Musk's involvement in xAI raises questions about its implications for OpenAI, a leading AI research organization. Musk's history with OpenAI, including his departure from its board and public criticisms, suggests ongoing competition between the two entities.
Musk's decision to open source xAI's early chatbot architecture contrasts with OpenAI's proprietary approach. This move, coupled with Musk's legal actions against OpenAI, underscores the rivalry between the two organizations.
