New Backing Helps Elon Musk’s xAI Raise Nearly $6 Billion

Elon Musk’s artificial intelligence startup, xAI, reportedly secured new backing that puts it close to a $6 billion funding round.

The round would value xAI at $18 billion, the Financial Times (FT) reported Thursday (May 23).

The new backing came from Lightspeed Venture Partners, Andreessen Horowitz, Sequoia Capital and Tribe Capital, per the report. Sequoia Capital was already a confirmed contributor.

Musk has been telling investors that xAI can compete with market leaders like OpenAI, Anthropic and Google by tapping into data, technology and business of other companies he leads, according to the report.

The company has been making waves by open-sourcing its AI chatbot, Grok, which many see as a step that could democratize AI technology and spur innovation in its commercial use.

The Grok model has been made available to X Premium+ subscribers via platforms such as GitHub and BitTorrent. The release aligns with Musk’s broader critique of rival AI company OpenAI’s lack of transparency, underscored by his legal confrontations with the organization regarding its AI models.

When xAI unveiled the open-source AI model in March, the company said on its website: “We are releasing the base model weights and network architecture of Grok-1, our large language model. Grok-1 is a 314 billion parameter Mixture-of-Experts model trained from scratch by xAI.”

The company initially released Grok in November, saying the chatbot “is designed to answer questions with a bit of wit and has a rebellious streak.”

At the time, xAI also said that Grok has real-time knowledge of the world via the X platform — the social media company owned by Musk.

In another development in the AI space, it was reported Tuesday (May 21) that French startup “H,” which had been known as Holistic AI before its rebrand, raised $220 million for its goal of building artificial general intelligence (AGI). H is working toward “full-AGI,” a level of AI that matches or exceeds human capabilities.

In December, French AI startup Mistral AI raised $415 million in a funding round that valued the company at around $2 billion. Mistral AI, which specializes in open-source software for chatbots and generative AI tools, introduced its first generative AI model, Mistral 7B, in September.