Tesla and SpaceX CEO Elon Musk has denied reports suggesting that his artificial intelligence (AI) startup, xAI, has secured $500 million from investors toward a $1 billion funding goal.
Musk took to the social media platform X to dismiss the claims, referring to the reports as fake news and addressing that the information is simply not accurate.
Elon Musk founded xAI in July 2023 as a response to concerns about the AI efforts of major tech companies, criticizing them for excessive censorship and safety measures.
The startup is to understand the true nature of the universe and competes with industry giants such as Google, Microsoft, OpenAI, and Anthropic.
Bloomberg had reported that xAI is in discussions for a valuation ranging between $15 billion to $20 billion and has secured $500 million in commitments.
Musk, however, disputes these claims, stating that the information is not accurate and terming it as fake news.
The reports questions about the accuracy of information circulating in the media regarding xAI’s funding and valuation.
This is not the first time Musk has denied fundraising for xAI. In December, he stated that his AI company was not raising funds, contradicting the startup’s filing with the U.S. Securities and Exchange Commission (SEC) to raise up to $1 billion in an equity offering.
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The filing also revealed that xAI had already raised about $135 million, with Musk addressing that the company would only accept a minimum of $2 million from outside investors.
Musk’s denial of fundraising, reports suggest that xAI is in discussions for a valuation between $15 billion to $20 billion, with adjustments in the coming weeks.
Investors and Musk are expected to finalize terms in the next couple of weeks, with some parties reportedly exploring the possibility of obtaining computing power instead of or in addition to xAI equity shares.
In November 2023, Musk announced an approach to funding xAI. He mentioned that X Corp investors would own 25% of xAI, showing a correlation between the investments in X and xAI. For instance, a $10 billion X investment would correspond to a $2.5 billion xAI investment.
Musk announced xAI’s first language model, Grok, in November. Grok is trained on data from X and as real-time access to the social media platform.
This signifies xAI’s commitment to advancing AI capabilities and disrupting the dominance of existing language models from companies like OpenAI and Google.
An SEC filing revealed that xAI raised $865.3 million in unregistered equity in December, with $134.7 million already sold starting November 29. The filing specified that these securities are offered to accredited investors with resale restrictions.