Elon Musk is seeking to raise up to $6 billion for his artificial intelligence (AI) venture, xAI, a move intended to compete against established entities like Microsoft-supported OpenAI. If successful, the funding round could value the company at a staggering $20 billion. Morgan Stanley has been enlisted to organize the round.
The effort to secure funding is not restricted to domestic investors, with Musk in discussions with potential financiers across the globe. This includes investors in Hong Kong, and Middle East sovereign wealth funds.
However, the fundraising initiative may be complicated by mounting geopolitical tensions and efforts by the US to limit overseas funding of its tech projects, illustrated by the forced divestment of a Saudi venture capital firm from Rain AI.
xAI’s first product, Grok, was unveiled in December. The language learning model stands out from competitors because it’s trained on social media content from X. Musk’s ambition for xAI is to revolutionize AI models, moving beyond the synthesizing of existing human-generated content to produce entirely new theories and insights.
While Grok marks a step towards achieving this vision, the company’s broader aim to “understand the universe” remains a future target. To help advance towards this goal, the team at xAI, including experts from CERN and the University of Toronto, is contemplating the use of math-focused applications for research.
While the direction of xAI following Grok is unclear, Musk touched on some fascinating topics during the company’s launch. This included the Fermi Paradox and the simulation hypothesis, hinting at possible areas of exploration for the AI.
The specifics of Musk’s financial backing for xAI have not been disclosed, but the entrepreneur has hinted at retaining a substantial ownership stake for current X shareholders. He has also recently expressed preference for having a large stake in Tesla, to ensure that its AI research and development is directed towards beneficial objectives, and not misaligned or dangerous pursuits.
