Elon Musk’s artificial intelligence company, xAI has secured $500 million in commitments from investors towards a $1 billion goal, according to people with knowledge of the talks.
The company is discussing a valuation of $15 billion to $20 billion, with terms potentially changing in the coming weeks. Elon Musk launched xAI as an alternative to Open AI, and its chatbot, Grok, uses social media posts on X for more recent data.
Musk’s $44 billion takeover of Twitter is expected to attract investors like Larry Ellison, Sequoia Capital, Andreessen Horowitz, Fidelity Management & Research Co., and Saudi Prince Alwaleed bin Talal. Musk announced that equity investors in X will own 25% of xAI, inviting them to invest at least 25% of their investment in X.
Musk and investors are set to finalize terms in the coming weeks, with some parties considering acquiring computing power in addition to or instead of xAI equity shares, which would benefit venture firms’ portfolio companies that process data intensively.