Future Tech

Musk’s xAI nears close of deal valuing startup at US$24b

Tan KW
Publish date: Fri, 24 May 2024, 08:22 AM
Tan KW
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Future Tech

Elon Musk’s artificial intelligence startup X.AI Corp is slated to complete a funding round in June that could value the company at more than US$24 billion including its latest influx of cash, according 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 hasn’t happened in the deal, which has been in motion since last year. Most recently, the company has been seeking 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 isn’t public.

Musk didn’t 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. Deal talks have been prolonged, the person said.

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

The deal will give xAI a pre-money valuation of US$18 billion, a metric that doesn’t 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 Inc’s Google and OpenAI as “pandering” to political correctness. He added that another goal for xAI is to “try to be the funniest AI.”


  - Bloomberg


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