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Elon Musk’s AI startup xAI raises $6 billion in funding



JP Morgan Chase is suing Tesla for $162m (£121m) over tweets in 2018 by boss Elon Musk that he could take the electric car maker private.

Elon Musk’s artificial intelligence startup, xAI, has successfully raised $6 billion from leading investors including Andreessen Horowitz and Sequoia Capital.

This latest round of funding increases the company’s valuation to an estimated $24 billion, positioning it as a major player in the AI ​​landscape.

The newly acquired funds will play an important role in bringing xAI’s first products to market, building critical infrastructure and accelerating research and development in future technologies. Musk’s company released its first generative AI model last November, called Grok. Grok, a term derived from the Martian word for “intuitive understanding” from Robert A. Heinlein’s science fiction novel *Stranger in a Strange Land*, aims to set new standards in AI capabilities.

Launched in July 2023, xAI is positioning itself as a formidable competitor to Microsoft-backed OpenAI and Alphabet’s Google. Elon Musk, 52 years old, co-founded OpenAI in 2015 together with Sam Altman, a notable American entrepreneur and investor. Generative AI models, such as those developed by OpenAI, can produce text, images, videos, and other data in response to user input. ChatGPT, OpenAI’s flagship generative AI chatbot, launched in November 2022, is recognized as the fastest-growing consumer application in history, with more than 100 million users.

However, Musk left OpenAI’s board in 2018 over disagreements over the company’s direction. xAI’s Grok model, initially released to subscribers of X (formerly Twitter), was followed this year by Grok-1.5V, with improved imaging capabilities.

In addition to Andreessen Horowitz and Sequoia Capital, other notable investors in xAI’s Series B fundraising round include Fidelity Management & Research Company, Valor Equity Partners, Vy Capital and Saudi investor Prince al-Waleed bin Talal. Musk revealed on

xAI’s mission, as outlined in a blog post, focuses on developing advanced AI systems that are “truthful, competent, and maximally beneficial to all humanity.” The company strives to understand the true nature of the universe, in line with its broader vision of technological progress.

In March, Musk filed a lawsuit against OpenAI and Sam Altman, claiming they violated the company’s founding agreement by prioritizing profits over benefits to humanity. This legal move underlines the competitive and philosophical divides in the rapidly evolving AI sector.

xAI’s fundraising success reflects a broader trend of substantial investment in AI startups, driven by the massive computing power required to train advanced AI models. Nvidia, a leading supplier of AI chips, recently reported a 262% increase in sales, due to rising demand for AI-specific processors.

San Francisco-based OpenAI reportedly reached a valuation of about $80 billion in February and has secured $13 billion in funding from Microsoft, highlighting the fierce competition and high stakes in the AI ​​industry.