Elon Musk’s AI Start-Up xAI Is Raising $6B To Challenge OpenAI
- by techbooky.com
- May 05, 2024
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CEO was still trying to evaluate investor interest in such substantial sums.
Some stated he had solicited investors in South Korea and Japan, while others alleged he had also targeted sovereign wealth funds in the Middle East. Despite regulatory documents demonstrating that xAI is raising funds, he has refuted multiple recent claims concerning financing. “xAI is not raising capital and I have had no conversations with anyone in this regard,” Musk said on X following the article.
As global tensions rise, raising capital in Hong Kong for a US artificial intelligence company may become a politically sensitive task.
To impede China’s advancement of cutting-edge technologies, Washington has attempted to impose export restrictions. The Biden administration outlawed US investment in Chinese artificial intelligence (AI) last year, including in Hong Kong. Musk’s xAI debuted its first product, Grok, a chatbot that learns from social media posts on X to provide more current responses than its rivals. Grok was introduced in December.
The fundraising is being coordinated by Morgan Stanley, which aided in funding Musk’s leveraged acquisition of X, formerly Twitter, in 2022, according to one of the sources. The size of the fundraising effort is indicative of the immense expenses involved in creating generative AI models, which generate text, graphics, and code that resemble humans in a matter of seconds. This process necessitates the use of cutting-edge chips, massive amounts of data, and processing power.
Rival to OpenAI, situated in San Francisco, has raised almost $13 billion from Microsoft alone. Billionaires have also been raised by other start-ups like Anthropic and Cohere from the likes of Google, Amazon, and the leading venture capital firms in Silicon Valley.
The US Securities and Exchange Commission received paperwork from Nevada-based xAI in December that revealed it was looking to raise $1 billion from equity investors. As per the filing, it has collected $135 million towards its target. According to a January Bloomberg story, it had raised $500 million. Musk called the
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