In order to reach his goal of a post-deal value of $18 billion for the firm, Musk is hoping to raise $3 billion to $4 billion.
The new artificial intelligence (AI) business xAI, founded by tech mogul Elon Musk, is responsible for creating the Grok chatbot. Musk is now attempting to raise up to $4 billion for the company.
As mentioned in a recent email sent out to prospective contributors, Musk is making it possible for certain investors to participate in fundraising rounds using special purpose vehicles (SPVs).
Investment vehicles known as special purpose vehicles (SPVs) enable several investors, such as VC firms and private investors, to combine their resources into one.
Despite offering a structured approach to investing, this system is not without its stated up-front costs of up to 5% plus ongoing management fees and interest.
Musk hopes to raise $3–$4 billion in funding, with a post-deal worth of $18 billion for the firm. Specifically, the email said that the goal is to raise the funds “in the next 2-3 weeks on a first-come, first-served basis.”
The San Francisco Bay Area-based company xAI, which Musk founded in March 2023, was formally launched in July of the same year.
The organization’s overarching objective is “comprehending the fundamental essence of the cosmos.” The company claims that its November release of the X-linked chatbot Grok, which outperforms OpenAI’s ChatGPT, was its first product.
The email to investors underlined the AI model’s training on data obtained from Musk’s X microblogging network as a possible selling point, in addition to Musk’s known success with Tesla.
“Concerns about an AI bubble emerge amid skyrocketing valuations and excessive development expenses,” says Mario Nawfal, an angel investor and entrepreneur who has spoken out against the recent surge of investments in artificial intelligence.
In addition to putting an emphasis on internal skills, xAI leverages AI tutors from a variety of disciplines to produce and improve high-quality data for training and evaluating models, as stated on the business website.
In March, Musk made a big announcement: xAI’s AI chatbot would be open-sourced. This will make it a rival to proprietary models like OpenAI’s ChatGPT.
Even though it has a high value and is using new technology, xAI is still pretty small. It has only 10 full-time programmers and uses between 5,000 and 10,000 GPUs.
The business did not respond immediately when Cointelegraph asked for further information from xAI. Grok faces stiff competition in the artificial intelligence chatbot space from technologies such as ChatGPT by OpenAI, Claude by Antropic, Copilot by Microsoft, Gemini by Google, and Meta AI by the formal name Facebook.
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