xAI, Elon Musk’s AI competitor to OpenAI, is in the process of raising $6 billion at an $18 billion valuation, according to a reliable source close to the deal. Investors will own a quarter of the company, and the deal is expected to close soon unless terms change.
Originally, xAI was seeking $3 billion at a $15 billion valuation, but those numbers were revised due to high investor demand.
Prospective investors were informed of the change and urged not to complain due to widespread interest in the deal.
Ventures like Sequoia Capital and Future Ventures, led by Musk’s friend Steve Jurvetson, are participating, with others like Valor Equity Partners and Gigafund likely to join.
The companies involved have strong ties to Musk’s ventures, with board members from SpaceX and Tesla among them.
The pitch to investors is described as engaging and outlines xAI’s goal of bridging the digital and physical worlds by utilizing data from Musk’s various companies.
Musk’s vision includes integrating xAI’s technology into his other ventures like the social media platform X and Tesla’s humanoid robot, Optimus.
Musk’s strategic moves with xAI may benefit X in the long run, despite its recent challenges.
The impact on OpenAI, which Musk has criticized in the past, remains uncertain as xAI gains momentum.
Musk’s efforts to differentiate xAI’s approach from OpenAI’s, including open-sourcing xAI’s chatbot architecture, are part of his ongoing campaign to set his ventures apart.
