Elon Musk’s AI Company xAI Raises $6 Billion At $24 Billion Valuation

Most entrepreneurs would be lucky to create one unicorn in their careers, but Elon Musk is creating them at will at this point.

xAI, Elon Musk’s AI startup, has raised $6 billion in a new funding round. The round values the 14-month-old company at $24 billion. The round saw participation from Valor Equity Partners, Vy Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal and Kingdom Holding. “The funds from the round will be used to take xAI’s first products to market, build advanced infrastructure, and accelerate the research and development of future technologies,” xAI said in a blogpost.

xAI was announced by Elon Musk in March 2023 as a response to OpenAI’s models appearing too woke and left-leaning. Musk had co-founded OpenAI all the way back in 2015, but had parted ways with the company in 2018. In 2022, OpenAI released their breakthrough product, ChatGPT, which took the world by storm. There had, however, been reports that ChatGPT’s answers were often too left-leaning, which was noticed by Musk. In July 2023, Musk announced xAI, and said that the company’s goal would be to create a more politically neutral AI.

And this had immediately shown in xAI’s products. In November, xAI had launched its own LLM named Grok. Grokwas billed as having a sense of humour as opposed to ChatGPT, which dourly refused to answer contentious questions. Grok also used colourful language and swore, and appeared to be politically neutral unlike other LLMs which were largely left-leaning. Grok also has an advantage over other LLMs — it can access to all of Twitter’s data to train its models, which is not available to other products.

xAI is now valued at $24 billion, and is yet another unicorn from Elon Musk’s stable. Among other unicorns he’s helped create are PayPal, Tesla ($560 billion), SpaceX ($100 billion), Solar City ($2.6 billion), Neuralink ($1 billion) and The Boring Company ($5.6 billion). He runs Twitter, which he bought for $42 billion, and his latest unicorn is xAI, which is already worth $24 billion. It remains to be seen how xAI fares against competition from OpenAI, Google, and Microsoft, but after creating yet another unicorn, Musk has already cemented his place among the greatest entrepreneurs of all time.