Elon Musk’s xAI has taken a crucial step to bolster its financial reserves and compete with Sam Altman’s OpenAI.
The AI startup announced in a blog post on Sunday that it had raised $6 billion (approximately €5.5 billion) in its Series B funding round.
The company, which is just a year old, counts prominent venture capital firms like Andreessen Horowitz and Sequoia Capital, as well as Saudi Arabia’s Kingdom Holding, among its investors.
“In the coming weeks, there will be more announcements,” Elon Musk said in an X post on Monday morning.
The prolific billionaire also revealed in a later X post that the pre-money valuation of xAI stood at $18 billion. This financial term refers to the value of a company before any equity investment is made.
Sunday’s announcement marks the first time xAI has publicly discussed its funding efforts. Musk had previously denied reports from Bloomberg and the Financial Times regarding xAI’s attempts to secure investors.
For Elon Musk, this influx of capital is critical. He views xAI as an alternative to OpenAI, a company he co-founded with Altman. Musk left OpenAI’s board in 2018.
The company behind the Chat GPT chatbot was valued at $80 billion (approximately €74 billion) or more after a deal allowing employees to cash out their shares, according to a February report by the New York Times, which cited sources familiar with the deal.
In February, Musk filed a lawsuit against OpenAI, accusing the company of violating its nonprofit mission through its partnership with Microsoft.
A year ago, Musk expressed his disappointment with the direction OpenAI had taken. He stated it was “not at all what I intended.”
“OpenAI was created as an open-source (that’s why I named it ‘Open’ AI) nonprofit company to serve as a counterweight to Google. But now it has become a closed-source, maximum-profit entity effectively controlled by Microsoft,” Musk wrote on X.
