Musk’s xAI In Talks To Raise $6B — Report

Just a month after reports that xAI was attempting to raise $1 billion — per a securities filing — it seems Elon Musk’s startup has bigger plans.

The AI company — a competitor to OpenAI — is in talks to raise up to $6 billion at a valuation of $20 billion, Financial Times reported

Per the report, the Austin, Texas-based company is in talks with family offices in Hong Kong and is targeting sovereign wealth funds in the Middle East for the new cash infusion.

Just a week ago, Musk denied a report xAI had secured $500 million in commitments from investors toward its $1 billion goal.

Musk was a co-founder in OpenAI, so AI is not new to him. X.AI was announced in July — funded by Musk himself —  and released an early version of its ChatGPT competitor, Grok, last month.

Sky-high valuations

While the $20 billion valuation may seem high for a company that has been pretty much kept under wraps, it is very much in line for what is happening in AI right now.

Last month it was reported another AI startup, Anthropic, was in discussions to raise $750 million in a funding round led by Menlo Ventures at a valuation of up to $18.4 billion. The San Francisco-based OpenAI rival had just raised a $300 million round at a pre-investment valuation of $4.1 billion in March — meaning a 4.5x valuation jump in just about nine months.

Then last week reports surfaced that Toronto-based Cohere is in discussions to raise between $500 million and $1 billion at a “significantly higher” valuation than the $2.2 billion it hit just last June when it raised a $270 million Series C led by Inovia Capital.

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Illustration: Dom Guzman