Elon Musk’s startup xAI is looking to raise $1bn

Elon Musk is seeking to raise $1bn for his artificial intelligence startup xAI, according to a US Securities regulator filing. The billionaire is racing to compete with rivals like OpenAI in the rapidly growing field of generative AI.

The company has raised $135mn in investments, according to a filing with the Securities and Exchange Commission. Investors are asked to invest a minimum amount of $2mn.

The companies that use generative AI–which can generate text and images with human-like characteristics–have raised millions of dollars in this year, after Microsoft’s OpenAI launched its consumer chatbot ChatGPT to great fanfare, back in November 2022. Critics warn that too much hype can create a bubble.

Musk co-founded OpenAI in 2015, but left the company three years later. OpenAI raised $10bn earlier this year from Microsoft, and Google has recently committed $2bn to Anthropic, an AI start-up founded by former OpenAI executives. Mark Zuckerberg and Meta, another Silicon Valley giant, have invested billions in their own AI products.

Musk launched xAI to “understand and understand the true nature of the universe” in July. The company launched Grok, a sarcastic chatbot that was trained using X. Musk acquired the social media platform for $44 billion a few years ago.Grok will only be available to certain premium X subscribers who pay around $16 a month.

Musk stated last month that investors in X will own 25% of xAI.

He said recently that “AI can do everything”, and will make human work obsolete. He has been critical, however, and signed a letter that called for a stop to the development of advanced AI.

Fundraising efforts are in response to the chaos that has recently engulfed OpenAI. Its chief executive Sam Altman was abruptly ousted and returned quickly. The causes of the turmoil remain a secret.

Axios was the first to report on the xAI fund-raising.