Elon Musk’s xAI is close to a $6 billion round
The rumors are intensifying. After it was announced several weeks ago that the AI startup xAI, which he co-founded, wanted to raise $4billion, Techcrunch is now reporting that the maker of the Grok models is about to raise a financing round of six billion dollars. Sequoia Capital and Future Ventures, the VC fund run by Musk’s long-time friend Steve Jurvetson, are expected to participate in the round.
xAI’s valuation is said to be $18 billion pre-money and around $24 billion post-money. That would suddenly make xAI significantly more valuable than many listed tech companies, including Robinhood or Snapchat. The social network X (formerly Twitter), which Musk bought, is already involved in xAI, hardly surprisingly. This has already integrated a chatbot, based on the AI model Grok from xAI, for its paying Pro users.
At $6 billion, xAI would be the best-equipped new AI company alongside the AI startups OpenAI (approx. $13 billion) and Anthropic (approx. $6 billion) – otherwise only big tech companies like Google are available, Microsoft, Amazon, and Meta have such large sums available to develop AI models. While OpenAI or Anthropic try to ensure that their LLMs don’t say anything wrong, Musk takes a different approach – and lets Grok complain.
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Valor Equity Partners led by Peter Thiel (Musk’s former PayPal co-founder) and Gigafund by co-founder Luke Nosek, who also comes from Musk’s circle, are also expected to participate in the round. According to reports, the fundraising will take place via Zoom, and Musk and Jared Birchall, the head of his family office, will make the calls in person.
After leaving OpenAI and the subsequent lawsuit against Sam Altman and the leading AI startup, Musk is seriously busy providing xAI with proper capital and participating in the booming business with AI models. The argument is apparently that xAI would find distribution via X, and that the other Musk companies such as Tesla or SpaceX could provide AI with valuable training data in the future. Tesla is also working on a humanoid robot called “Optimus,” which could use Grok models.
