Elon Musk’s xAI Aims for $6 Billion Funding to Compete with OpenAI

In a recent report by the Financial Times, Elon Musk’s xAI is actively in talks to secure a substantial $6 billion from a global consortium of investors, including notable family offices in Hong Kong. This move signifies xAI’s ambition to establish itself as a major competitor alongside industry giants like Microsoft and OpenAI.


Elon Musk is reportedly determined to achieve a $20 billion valuation for xAI and has reached out to sovereign wealth funds in the Middle East, as well as potential investors from Japan and South Korea. Morgan Stanley is said to be organizing this fundraising, although the bank has not officially commented on the matter.


In comparison, xAI’s rival, OpenAI, the creator of ChatGPT, has secured a substantial sum of around $13 billion, with Microsoft as its primary investor. OpenAI is also gearing up for a significant new funding round to fuel its continued growth.


In the landscape of large language model startups, Anthropic has emerged as a significant player, receiving an impressive investment of about $6 billion from major tech players Google and Amazon.


xAI recently achieved a milestone by securing investor commitments totaling $500 million, a significant step toward its ambitious funding target of $1 billion. The valuation during these discussions ranges between $15 billion to $20 billion.


This development highlights the intense competition in the AI industry and the significant investments being sought by key players to stay at the forefront of technological advancements.