Elon Musk’s artificial intelligence startup xAI is reportedly in talks for a funding round that would value the company at $40 billion.
The company, founded by the Tesla and SpaceX mogul last year, was last valued at $24 billion just five months ago after a $6 billion funding round — more than double the initial target set by Musk’s team.
Musk is trying to raise several billion dollars for xAI in this latest funding round. A source familiar with the matter told The Wall Street Journal,
The talks are still in the initial stages.
Any cash raised will add to the company’s $40 billion valuation.
Musk did not respond to requests for comment.
Silicon Valley AI startups are raising billions of dollars to fund their expensive technological advances — and try to gain an edge in the AI race.
Earlier this month, ChatGPT-maker OpenAI raised $6.6 billion at a valuation of $157 billion – making it one of the largest private funding rounds in US history.
AI startup Perplexity is in talks to raise funding, which would more than double its valuation to $8 billion. according to the journal,
Mainstream tech giants like Google parent Alphabet and Mark Zuckerberg’s Meta are betting big on artificial intelligence and plowing their profits into new projects like Alphabet’s Gemini bot.
Meta is reportedly working on its own AI-powered search engine, As per information,
“If you’re training a frontier model, you’re going to need an enormous amount of computation,” Musk said during a video conference Tuesday.
Musk – the world’s richest person with a net worth of $269.3 billion, according to Forbes – has long been involved in artificial intelligence.
He co-founded OpenAI in 2015 and left the company in 2018.
When OpenAI saw immense success with its ChatGPT chatbot, Musk created xAI and has been trying to take the lead in the technological race ever since.
he has OpenAI sued twice this yearHe alleged that he was manipulated into believing that the company – in which he had invested millions of dollars – was a non-profit.
Meanwhile, xAI has built what it claims The world’s largest data center in Memphis, Tennessee,
The startup is training new versions of its AI chatbot, Grok, which is currently available only on Musk’s social media platform X, formerly known as Twitter.
Musk said Monday that XAI plans to double its data center capacity from 100,000 graphic processing units, or GPUs, to 200,000.
Nvidia CEO Jensen Huang has praised XAI’s massive data center, calling it “easily the fastest supercomputer on the planet.”
But Musk’s startup — which released its chatbot just four months after the company’s launch — is still chasing OpenAI and Google, who have years on the xAI.
And it seemed like the company’s only revenue stream was the X Premium subscription, which includes Grok.
It’s unclear how attractive a premium subscription is to xAI.
As of last spring, there were 640,000 X Premium subscribers out of more than 400 million active monthly users on the platform, according to statista,
Last week, xAI released a tool that developers can use to build applications with Grok, adding another source of revenue.
Musk is also investing resources from his other companies to help the company.
xAI has hired some employees from Tesla and Musk Thousands of Nvidia GPUs diverted From EV makers to AI startups.
According to the Journal, the AI startup has discussed a deal in which the company would receive some of Tesla’s revenue to allow access to its technology.
On a Tesla earnings call last week, Musk said that xAI “has been helpful at times for Tesla AI in terms of things like scaleup.”
Tesla shareholders have sued Musk Depleting shared resources.
