Elon Musk’s xAI nears close of deal valuing the artificial intelligence start-up at US$24 billion

The start-up, a rival to ChatGPT creator OpenAI, has been marketed to a range of Silicon Valley investors
In an interview at the Viva Technology conference in Paris, Musk said xAI’s goal is to be ‘as truth-seeking as possible’ and to be ‘the funniest AI’

Artificial intelligence

Bloomberg

Published: 6:51pm, 24 May 2024

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Elon Musk’s xAI Corp is slated to complete a funding round in June that could value the artificial intelligence (AI) start-up at more than US$24 billion including its latest influx of cash, according to one person familiar with the deal.

The company was slated to wrap up a roughly US$6 billion financing earlier this month, but the final close still has not happened in the deal, which has been in motion since last year. Most recently, the company sought as much as US$6.5 billion and is aiming to get closer to that target over the next few weeks, said the person, who asked not to be identified because the information is not public.

Musk did not immediately respond to an emailed request for comment.

The financing ambitions of xAI have dramatically expanded since Bloomberg reported in January that the company was seeking to raise US$1 billion. Talks over this deal have been prolonged, the person said.

The start-up, a rival to ChatGPT creator OpenAI, has been marketed to a range of Silicon Valley investors via a pitch deck that touted Musk’s track record at Tesla and SpaceX, Bloomberg News previously reported.

Elon Musk addresses via videoconference the audience at Viva Technology, Europe’s biggest start-up and tech conference, at the Porte de Versailles exhibition centre in Paris on May 23, 2024. Photo: Agence France-Presse

The pitch materials also noted that xAI and its chatbot, Grok, will be able to make use of the high-quality data from X, Musk’s social platform previously called Twitter. Having access to data is crucial for building large language models – the technology that powers AI chatbots – an area where xAI aims to compete with other well-funded businesses such as Microsoft-backed OpenAI.

The deal will give xAI a pre-money valuation of US$18 billion, a metric that does not include dollars raised. The Financial Times previously reported some details of the deal.

On Thursday, Musk spoke in a remote interview at the Viva Technology conference in Paris about xAI’s goal of being “as truth-seeking as possible.”

He criticised other AI models developed by Alphabet’s Google and OpenAI as “pandering” to political correctness. He added that another goal for xAI is to “try to be the funniest AI”.