Elon Musk’s xAI Seeks New Funding, Eyes $40 Bn Valuation: Report

Elon Musk's artificial intelligence startup, xAI, is exploring a new funding round aimed at increasing its valuation to an estimated USD 40 billion, according to a Bloomberg report. 

The funding discussions, still in early stages, stresses Musk's ambitious vision for xAI and its place within the rapidly growing AI industry. This potential raise follows xAI’s May financing round, which valued the company at USD 24 billion and brought in USD 6 billion in capital. The increase would represent a significant jump in xAI's market standing, vaulting it among the highest-valued startups in the United States.

The funding details remain tentative, with talks ongoing and subject to change, said mentioned a source to Bloomberg, who requested anonymity while discussing private matters. The Wall Street Journal first reported on the potential deal, citing individuals close to the negotiations.

Early Thursday, Musk addressed a virtual audience at the Future Investment Initiative conference in Riyadh, where he discussed xAI’s need for expanded computing power. He stated that his goal is to double xAI’s compute resources, an essential asset in training large-scale AI models. He highlighted xAI’s Memphis facility as already housing the most powerful AI training cluster globally, an advantage Musk is keen to strengthen further. “We already have with xAI the most powerful training cluster in the world and we are about to double it,” he said.

Musk’s plans for xAI bring it into closer competition with OpenAI, the industry leader currently valued at USD 157 billion. Musk, who co-founded OpenAI before parting ways over philosophical differences, has become a vocal critic of its methods. 

(Inputs from Bloomberg)