LET’S GROK ‘N’ ROLL
Musk aims to raise billions for his AI startup
Elon Musk’s artificial intelligence startup xAI — which powers the snarky Grok chatbot — is aiming to raise billions of dollars in the coming weeks in a private funding round that could value the company as high as $20 billion, The Post has learned.
The fresh capital raise — which comes as key rival Google grapples with the meltdown of its “woke” AI chatbot Gemini — is expected to take place in mid- to late March and wrap up quickly, sources familiar with the matter told The Post.
Musk is looking to raise between $1 billion and $3 billion in cash from outside investors at a valuation that could range between $10 billion and $20 billion, two of the sources said. The mercurial tech billionaire may also personally invest several billion dollars in the startup himself, one of the sources said.
That could amount to a range previously reported by the Financial Times, which said in January that Musk was in talks to raise up to $6 billion and had approached the sovereign wealth funds as well as investors in Japan, South Korea and Hong Kong.
Still behind OpenAI
Other participants are expected to include a small group of Musk’s handpicked investors, including Middle East-based sovereign wealth funds and US-based family offices with pre-existing ties to him.
A Musk spokesman declined to comment.
Despite signs of activity, Musk has repeatedly denied that xAI was raising money. “xAI is not raising capital and I have had no conversations with anyone in this regard,” Musk said in response to the FT report earlier this year.
At the time, xAI had already disclosed plans for a fund-raise in a regulatory filing. In December, xAI said it would raise at least $1 billion through an equity offering.
Musk has positioned xAI as a direct competitor to Google and ChatGPT creator OpenAI. In November, Musk posted a barb from Grok: “ChatGPT 4? More like ChatGPT Snore!” (In response, OpenAI CEO Sam Altman branded Grok “cringey boomer humor.”)
The xAI round, while sizable for any other start-up, would still place its valuation at a fraction of that of OpenAI, which recently closed an employee share sale that pushed its worth north of $80 billion.
OpenAI has raised $11.3 billion from investors, according to Crunchbase, and ChatGPT had more than 100 million active weekly users as of last November — establishing it as a clear front-runner in the AI race. More recently, OpenAI unveiled Sora, a tool that creates videos based on users’ text-based prompts.
By comparison, Musk has yet to articulate a clear product lineup for xAI beyond Grok, which he has touted as a “TruthGPT” to counter the left-leaning bias in other AI chatbots. xAI released Grok last year for use by paid subscribers on X.
Elsewhere, OpenAI CEO Sam Altman is reportedly seeking to raise trillions of dollars as part of a wildly ambitious plan to jump-start the production of precious computer chips needed to power AI.
Musk’s ownership of X could provide a partial explanation for the limited scope of the funding round. Through the social media giant, xAI already has access to a massive data trove to train its AI models, as well as the company’s hardware infrastructure.