Elon Musk denies reports of xAI securing $500 million investment

AI labeled Funding and Elon Musk

Elon Musk has refuted reports claiming that his artificial intelligence (AI) company, xAI, has secured $500 million of a $1 billion investment goal. Musk responded to a user on X (formerly Twitter), stating that the report is inaccurate. The Bloomberg article had cited sources claiming that xAI is in discussions about a valuation between $15 billion and $20 billion, with potential adjustments in the coming weeks.

Musk and investors are said to be working towards finalizing the terms in the coming weeks. Ongoing discussions include the possibility of obtaining computing power in addition to or instead of xAI equity shares. In November 2023, Musk had mentioned that equity investors in X would receive a 25% ownership stake in xAI. This suggests that these investors are encouraged to invest at least 25% of their X investment amount into xAI. For example, if they invested $10 billion in X, they are invited to invest $2.5 billion or more in xAI.

xAI Previously Secured $865.3 million in unregistered equity securities

xAI was launched by Musk as an alternative to OpenAI due to philosophical disagreements. The company’s chatbot, Grok, is powered by social media content from X. In December 2023, xAI secured a deal for the private sale of $865.3 million in unregistered equity securities, according to a filing with the United States Securities and Exchange Commission. The filing stated that these securities would be sold to accredited investors, subject to resale restrictions under Rule 506(b). As of the filing date, $134.7 million of securities had already been sold.

Elon Musk has denied the accuracy of reports suggesting that xAI has secured $500 million in investments. Discussions about xAI’s valuation and investment terms are ongoing, with the possibility of including computing power as part of the investment. Musk’s alternative AI company, xAI, continues to make progress with its chatbot, Grok, powered by social media content from X.

Author: Dominion

Domie loves writing and building cool stuffs.