Elon Musk’s xAI startup raises $6B in fresh Series B funding

(Reuters): Elon Musk’s artificial intelligence startup xAI has raised $6 billion in a Series B funding round, which is seen as the acceleration of the company’s efforts to push forward in the heating AI race and to challenge market rivals such as OpenAI.

The Series B funding round of $6 billion came less than a year after the company’s debut in July 2023 and was backed by investors including Andreessen Horowitz and Sequoia Capital, among others, xAI said in a blog post on Sunday.

The money will be used to bring xAI’s first products to market, build advanced infrastructure and accelerate research and development of future technologies, xAI said.

The xAI startup released the Grok chatbot, which was trained to be integrated into the X platform, which Musk also owns.

In a blog post on Sunday, the company touted the advancements of the xAI, citing the recent announcements of the improved Grok-1.5 model with long context capability and Grok-1.5V with image understanding.

“There will be more to announce in the coming weeks,” Musk said in a post on X, formerly Twitter, in response to the funding announcement.

“Pre-money valuation was $18B,” he noted.

The AI race has been heating up, with several investors signing big checks for startups looking to compete with market leaders like OpenAI. Tech giant Microsoft has invested about $13 billion in OpenAI, while e-commerce giant Amazon backed Anthropic with $4 billion in funding.

Musk co-founded OpenAI in 2015 but left in 2018, later saying he was uncomfortable with the profit-driven direction the company was taking under the leadership of CEO Sam Altman.