The artificial intelligence start-up xAI launched by Elon Musk is gaining momentum. It has just announced that it has completed financing of no less than $6 billion on a pre-financing valuation of $18 billion. The objective is clear: compete with OpenAI and its famous ChatGPT by pushing Grok – its own chatbot – to a larger number of users.
Sequoia Capital and Future Ventures, the venture capital fund co-founded by Steve Jurvetson, friend of Elon Musk, are participating in the funding round. Alongside them, several sources indicate that Valor Equity Partners and Gigafund, whose founders are also part of the Tesla boss's inner circle, should also participate. TechCrunch reports that the deal would give investors a quarter of the company and is expected to be finalized in the coming weeks, unless the terms of the deal change.
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Elon Musk is banking on the popularity of his companies to raise the stakes
Recall that the terms of the agreement have already changed once. It was reported that Jared Birchall, who heads Elon Musk's family office, told potential investors that xAI was initially raising $3 billion at a pre-funding valuation of $15 billion. An email subsequently circulated explaining that the amount is now $6 billion out of $18 billion, given the growing number of interested potential investors.
By raising the stakes in this way, Elon Musk hopes to increase the popularity of xAI and at the same time build the AI empire that he has dreamed of for several years. For the record, the businessman has had a stormy relationship for several years with OpenAI, a start-up in which he invested time and money, at least in its early stages. Today, as the company has become the hottest AI startup with ChatGPT and its LLM GPT, Musk blames Sam Altman for transforming the company's vision from an organization non-profit to a company valued at some 80 billion dollars;
A business ecosystem and millions of data points
It was previously reported that the businessman was counting on his company Tesla to become the epicenter of this empire. During the company's financial results for the first fiscal quarter of 2024, Elon Musk indicated that Tesla should be a firm defined as oriented towards AI or robotics rather than an automobile manufacturer.
If Musk is so confident, it is in particular because Tesla is full of millions of data that can be used both for the development of artificial intelligence and for that of humanoid robots. The generative AI model developed by xAI called Grok-1.5 and which today powers Grok, the AI chat from
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In the future, Tesla's goldmine of data could be used to improve xAI's LLM and allow the start-up to offer fine-tuned models for specific applications, in areas such as robotics, space, automobiles, etc. A way for the start-up to fully compete against its biggest rival, OpenAI.
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