xAI Seeks New Funding, Could Hit $120 Billion Valuation
Elon Musk’s artificial intelligence venture, xAI, is exploring new financing opportunities that could elevate its valuation to $120 billion, up significantly from $80 billion just a month ago, according to sources familiar with the discussions. The negotiations are still in their early phases, and both the valuation and the potential investment—reported at around $20 billion—may fluctuate as talks progress.
This funding initiative follows a major financing round by OpenAI, creator of ChatGPT, which recently announced a staggering $300 billion valuation. The emergence of ChatGPT in late 2022 sparked a rush of investment in A.I. firms, including xAI.
xAI has integrated with Musk’s social media platform, X, which he sold to xAI as part of a stock deal valuing the A.I. company at $80 billion. Grok, an xAI-developed chatbot, utilizes data from X users and has been integrated into the platform.
Interest in AI investments briefly waned late last year as various startups were absorbed by tech giants like Google and Amazon. However, xAI and OpenAI remain at the forefront, both actively seeking large investments to advance A.I. technology.
Musk, who co-founded OpenAI in 2015 before departing over strategic disagreements, has since launched xAI with ambitions to rival his former venture. He initiated legal proceedings against OpenAI over concerns regarding its shift from nonprofit to profit-centric operations, but he withdrew the suit earlier this year, only to revive it in federal court last August.
While Musk did not comment on xAI’s funding discussions, the potential for substantial investments continues to highlight the ongoing A.I. boom. Further developments are anticipated as negotiations unfold.
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