Big money for xAI! Elon Musk's AI company secures billion-dollar investment

Elon Musk's AI venture, xAI is said to be on the verge of securing a substantial investment from Silicon Valley investors. The company has set its sights on raising USD 6 billion at an USD 18 billion pre-money valuation, with the deal expected to be finalised in the upcoming weeks, according to reports.

Direct Competition with OpenAI

Reports from The Information and TechCrunch indicate that xAI, founded by Musk, is poised to directly challenge OpenAI in the booming AI technology sector. Musk's public criticisms of OpenAI's transition from a nonprofit model to a profit-oriented one have fueled his determination to compete with the organization he co-founded.

One of xAI's key selling points to investors is its seamless integration with Musk's various ventures, including SpaceX, Tesla, Neuralink, and The Boring Company. The pitch highlights xAI's potential to contribute to ambitious projects like advanced robotics and self-driving cars, aiming to "master the physical world."

Support from Silicon Valley

Despite recent controversies, Elon Musk's ties and influence in Silicon Valley have proven advantageous for xAI. Venture capital firms, including Future Ventures, co-founded by Musk's associate Steve Jurvetson, are reportedly participating in the funding round, showcasing support from the tech community.

xAI's flagship offering, Grok, an AI chatbot integrated into Musk's social media platform X (formerly known as Twitter), has faced criticism for its inaccuracies. It has been noted for failing to distinguish between real and fake news as well as disseminating false information.

Leveraging Hype and Investment

Despite Grok's shortcomings, Musk has leveraged the hype surrounding xAI to bolster X's performance. With X holding a stake in xAI, Musk is optimistic about translating xAI's potential into a profitable platform for his social media venture, despite the challenges posed by the AI chatbot's performance issues.