Elon Musk’s artificial intelligence venture, xAI, has initiated discussions with potential investors for a substantial funding round that could value the company at approximately £40 billion. The talks, whilst in their preliminary stages, signal an ambitious move to secure several billion pounds in fresh capital.
The funding initiative follows xAI’s successful series B round in May, which raised £6 billion and achieved a post-money valuation of £24 billion. Notable investors included prestigious venture capital firms Andreessen Horowitz and Sequoia Capital.
xAI, launched in July 2023, positions itself as a direct competitor to OpenAI’s ChatGPT. The company recently announced plans to open-source Grok, its flagship chatbot, enabling public access to the underlying code. This strategic decision aligns xAI with other industry players like Meta Platforms and Mistral, who have embraced open-source AI models.
The AI startup has enhanced Grok with image-comprehension capabilities, allowing paid subscribers on Musk’s X platform to interact with the chatbot through image-based queries. Musk maintains that while this represents an early iteration, rapid improvements are forthcoming.
The artificial intelligence sector continues to witness intense competition, with industry giants Microsoft-backed OpenAI and Alphabet’s Google leading substantial investment drives. OpenAI recently secured £6.6 billion in funding, potentially valuing the company at £157 billion and solidifying its position among the world’s most valuable private enterprises.
The funding pursuit demonstrates Musk’s expanding technology portfolio, which includes Tesla, SpaceX, X (formerly Twitter), The Boring Company, and Neuralink. Each venture represents a significant stake in emerging technologies, from electric vehicles to space exploration and neural interfaces.
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