Tech visionary Elon Musk is embarking on a bold endeavor to secure up to $4 billion in funding for his groundbreaking artificial intelligence (AI) startup, xAI. The mastermind behind the revolutionary X-linked AI chatbot Grok is reportedly offering select investors the opportunity to participate in funding rounds through special purpose vehicles (SPVs), which allow various venture capital firms and individuals to invest collectively through a single entity.
While this presents a unique investment opportunity, reports indicate that there are upfront fees of up to 5% as well as management fees and interest to consider. Nevertheless, Musk aims to raise an impressive $3 billion to $4 billion in this funding round, potentially valuing xAI at a staggering $18 billion upon completion. The company anticipates raising the funds within the next 2-3 weeks on a first-come, first-served basis.
Established by Musk in March 2023 and headquartered in the scenic San Francisco Bay Area of California, xAI aspires to unravel the true essence of the universe. In November, the company unveiled its inaugural product, the X-linked chatbot Grok, boasting its superiority over the popular ChatGPT.
The email sent to potential investors reportedly emphasized Musk’s successful track record at Tesla and the fact that the AI model was trained using data from his microblogging network, X. Entrepreneur and angel investor Mario Nawfal weighed in on the matter, expressing concerns about the burgeoning AI bubble due to soaring valuations and exorbitant development costs.
xAI prides itself on its team of in-house AI tutors, hailing from diverse fields and committed to producing and curating top-notch data for training and evaluating its models. Despite its staggering valuation, xAI remains a relatively small startup with only 10 full-time engineers and between 5,000 and 10,000 GPUs, according to reports.
Cointelegraph reached out to xAI for further details but did not receive an immediate response. Grok competes in a crowded AI chatbot marketplace, facing rivals such as OpenAI’s ChatGPT, Antropic’s Claude, Microsoft’s Copilot, Google’s Gemini, and Meta AI from the company formerly known as Facebook.
As the AI industry continues to boom with billions pouring into startups, it is evident that the metaverse is not being killed by AI but rather built by it, as highlighted by Alien Worlds and the Bittensor vs. Eric Wall debate in AI Eye magazine.