Elon Musk’s xAI Secures $6 Billion To Compete With ChatGPT
Elon Musk’s AI startup, xAI, successfully raised $6 billion in a Series B funding round on May 26. The latest Series B round included participation from Vy Capital, Andreessen Horowitz, Sequoia Capital, and Saudi billionaire Prince Alwaleed Bin Talal.
According to an official blog post from the xAI startup, the capital raise will bring xAI’s first products to market, build advanced infrastructure, and accelerate research and development of future technologies. Elon Musk also hinted at more announcements in the following weeks.
The funding round boosted xAI’s value to $24 billion, a major increase from its previous value of $18 billion just 11 months after its launch in July 2023.
Pre-money valuation was $18B
— Elon Musk (@elonmusk) May 27, 2024
In sharp comparison, OpenAI, the creator of ChatGPT, is valued at $80 billion. Enthusiasts believe the valuation is fair as OpenAI was founded in December 2015, an eight-year head start over xAI.
Musk has avidly supported AI technology, which led him to co-found ChatGPT maker OpenAI. His involvement was short-lived following a fallout with the management team, however.
In March 2024, Musk sued OpenAI and its co-founder Sam Altman, accusing them of betraying the nonprofit’s mission statement and becoming a “closed-source de facto subsidiary” of Microsoft.
According to the lawsuit, Musk donated over $44 million to OpenAI between 2016 and September 2020 and was its largest contributor for several years.
Elon Musk has filed a lawsuit against OpenAI for breach of contract, breach of fiduciary duty and unfair business practices, and is asking for OpenAI to revert back to open source, and to share all it's research for the benefit of humanity.https://t.co/5jPiAUKMrO pic.twitter.com/f9c11igEvc
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