Elon Musk’s xAI secures $6B to Rival ChatGPT

| Updated on May 28, 2024

AI venture from Elon Musk, xAI, has announced a $6 billion series B funding round. It is one of the largest deals in the recently created AI race. Elon Musk was looking to raise capital to aggressively compete with rivals like Google, OpenAI, and Microsoft. 

The latest funding round saw participation from Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity, Prince Alwaleed Bin Talal, and Kingdom Holding. xAI announced this news in a blog. 

With the new funding round, xAI is now valued at $18 billion. Elon Musk confirmed that the investment round was valued at $18 billion pre-money. 

Elon is one of the earliest investors in the AI industry. He is one of the co-founders of OpenAI, a startup in which he has invested millions of dollars. However, the love for OpenAI didn’t last long and years later he sued OpenAI and its co-founder Sam Altman for allegedly betraying its mission statement and becoming a “closed-source de facto subsidiary” of Microsoft. He was also critical of Gemini from Google for bias in its answers. 

After that Musk formed xAI Corp to launch its own rival to ChatGPT or Gemini. The new Grok version 1.5 is now available to premium X users. The company also previewed the multimodal capabilities of Grok in April. xAI Xorp also open-sourced the Grok model without any training code earlier this year. 

Grok is still technologically inferior to OpenAI’s ChatGPT. However, Musk believes that it could become a ChatGPT competitor by the end of this year.  

With this, the AI race has been heating up with investors giving out big bucks for startups looking to compete with market leaders like OpenAI.

Manisha Singh

Journalist / Writer