Elon Musk's artificial intelligence startup xAI is reportedly engaged in discussions to secure funding of up to $6 billion from global investors.
According to Reuters, which quoted Financial Times, the startup has been engaged in discussions with family offices in Hong Kong and is strategically reaching out to sovereign wealth funds in the Middle East to secure the desired funding, as reported.
The development signifies Musk's ambition to position xAI as a formidable competitor to OpenAI in the field of artificial intelligence.
The competition in the AI race is intensifying, with numerous investors writing substantial checks for startups seeking to capitalise on the trend that has dominated Silicon Valley's focus in the past year.
Achieving a funding milestone of $6 billion would significantly surpass xAI's initial target of $1 billion, as outlined in their recent filing with the US Securities and Exchange Commission.
Just last week, Elon Musk refuted a report claiming that xAI had garnered $500 million in commitments from investors, a portion of its targeted $1 billion funding goal.
Elon Musk has reportedly reached out to investors in Japan and South Korea for the current fundraising efforts, according to Financial Times.
The coordination of the fundraising activities is said to be led by Morgan Stanley, the same bank that played a role in financing Musk's acquisition of the social media platform X, formerly known as Twitter.
Musk has consistently expressed his commitment to developing AI with enhanced safety measures. Although he co-founded OpenAI in 2015, he relinquished his position on its board in 2018.
Recently, Musk issued a cautionary statement about the development of AI and robotics outside of Tesla, asserting that he would be hesitant to position Tesla as an AI leader unless he obtained 25 per cent voting control.
xAI's valuation at $20 billion would still be a fraction of OpenAI's, but will compare with the valuations of certain peers, including Google-backed Anthropic.
The AI industry has emerged as a noteworthy exception in a relatively subdued startup funding landscape, buoyed by the widespread popularity of ChatGPT and several of its imitations.
Musk in November last year launched his own ChatGPT competitor ‘Grok’ , an AI model which borrows its name from science fiction writer Robert E Heinlein and boasts of having a "bit of wit” and a "rebellious streak."
Grok was built at xAI, a Musk-founded lab, to compete with OpenAI, Google and other market players already ahead in the game with their own AI chatbots, which are much more advanced at this stage than Grok.
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