Elon Musk’s xAI raises $6 Billion from top investors Valor, a16z, and Sequoia

Elon Musk’s xAI gets a huge $6 billion in funding to compete aggressively in AI. Elon Musk’s xAI aims to introduce honest AI systems to the market, yet its news summary feature has drawn criticism for potentially causing hallucinations and false information.

xAI, Elon Musk’s AI startup, raised $6 billion in a new funding round, the company said today. This is one of the biggest deals in the very new and hot field of AI, and Musk is using the money to aggressively compete with OpenAI, Microsoft, and Google. Some of the investors in xAI’s Series B funding are Valour Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity, Prince Alwaleed Bin Talal, and Kingdom Holding, the company said in a blog post.

The money backs up what XAI said in April—that it wanted to raise $6 billion. The round that would have valued xAI at $18 billion was almost ready to begin. The question was whether social network X had also invested in xAI, a startup that started only last year. Before adding the money, Musk confirmed that the investment round was worth $18 billion.

Musk was one of the first and most well-known businesspeople to work with AI. The electric car company he runs, Tesla, is the best at making cars that can drive themselves. He also helped start the company OpenAI and has put tens of millions of dollars into it. Musk sued OpenAI and its co-founder, Sam Altman, in March, saying they had broken their mission statement and turned OpenAI into a “closed-source de facto subsidiary” of Microsoft. This shows that Musk no longer loves OpenAI as much as he used to. He also asserted that Google’s approach to creating its AI products was biased.

Musk’s Grok Chatbot: Unveiling 1.0 to 1.5 and the Promise of Truthful AI

In November, Musk released the ChatGPT-rivalling Grok 1.0 model of its chatbot, a year after starting xAI. After some time, the company gave the model to Premium+ users on X, who pay $16 a month through a chatbot. The new Grok 1.5 model was released in April, and Premium users on X were also able to use the chatbot. The Musk-owned company also showed off Grok’s multimodal features in April. The company made the Grok model public earlier this year, but it didn’t come with any training code.

In a blog post, xAI said that it would use the money from the new round of financing to bring its first products to market, build more advanced infrastructure, and speed up the research and development of new technologies. The business is probably going to look for partnerships to bring Grok to users other than X. The business says it wants to make AI systems that are “truthful.” However, people claim that Grok’s news summary feature on X causes hallucinations and provides false information.