Elon Musk’s AI company, xAI, is reportedly in the process of raising a significant amount of money from Silicon Valley. The company is said to be aiming for $6 billion on an $18 billion pre-money valuation. This move comes as Musk openly criticizes and feuds with OpenAI, the AI giant that he helped create. Musk has been vocal about his dissatisfaction with OpenAI’s shift from an open, nonprofit model to a more profit-seeking approach.
Reports suggest that Musk and his associates have been pitching xAI as an AI brand that will eventually integrate with Musk’s other companies, such as Tesla, SpaceX, The Boring Company, and Neuralink. The pitch claims that xAI will be unique from other AI companies because it will “master the physical world.” The goal is for xAI to train on data from all of Musk’s companies and eventually assist Tesla in developing fully self-driving cars and a robot called Optimus.
It’s no surprise that Musk is likely to succeed in raising big money from tech venture capitalists. Despite recent hits to his reputation, Musk has strong connections in Silicon Valley, and sympathetic VC firms have always been part of his support network. Future Ventures, co-founded by Musk’s old associate Steve Jurvetson, is reportedly participating in this funding round.
However, it’s important to note that xAI’s only real product at this point is Grok, an AI chatbot integrated into Musk’s social media company, X (formerly known as Twitter). Unfortunately, Grok has not been performing well. It recently failed to distinguish between real news and a joke, reporting a humorous post as legitimate news. Grok also fabricated a fake story about Iran striking Tel Aviv with missiles, which X then promoted to its massive user base.
Despite Grok’s shortcomings, Musk is leveraging the hype around xAI to support X. TechCrunch reports that X owns a stake in xAI, meaning that the social media company, which has seen a decline in revenue under Musk’s ownership, stands to benefit from xAI’s success.
In conclusion, Musk’s AI company xAI is raising a significant amount of money in Silicon Valley. The company aims to differentiate itself from other AI companies by “mastering the physical world” and integrating with Musk’s other ventures. While xAI’s main product, Grok, has faced criticism for its performance, Musk is using the excitement around xAI to support his struggling social media company, X. With the backing of sympathetic venture capitalists and Musk’s influence in the tech industry, xAI has the potential to make a significant impact in the AI space.
