In a statement, Elon Musk reported that his artificial intelligence (AI) firm, xAI, has garnered $500 million in commitments from investors, aiming for a revised goal of $1 billion. The tech mogul, who leads SpaceX and Tesla, and is the owner of Twitter, made this announcement in response to a user post on the X social media platform.
The X app allows users to ask questions and receive witty responses from Musk’s xAI AI bot, Grok.
Grok was made available to X Premium+ subscribers following testing with a limited number of users on Friday, marking the first significant step in xAI’s mission to develop AI tools designed to aid humanity in its quest for knowledge and understanding. The company aims to build AI tools that help people “share knowledge and truth with the world.”
Musk, who has criticized Big Tech’s AI initiatives as rife with censorship, launched xAI in July. It describes itself as a “maximum truth-seeking AI” that seeks to fathom the intricacies of the universe and compete with AI offerings such as Google’s Bard and Microsoft’s Bing AI. Musk has stressed that xAI’s advantage is its real-time access to data via the X platform, which he says gives it an edge over competing models.
- Related: LA Gears Up for Driverless Future: Waymo Nears Launch of Robo-Taxi Service in City of Angels
According to its website, the xAI team has 15 employees, but it is unclear needs to be clarified how or whether the company is making money. It registered a prospectus in December to solicit up to $1 billion from investors via equity shares.
Among the investors reportedly committed to xAI are Sequoia Capital, Andreessen Horowitz, Fidelity Management and Research Co., and Saudi Arabia’s Alwaleed bin Talal. The firm is reportedly discussing securing a valuation of $15 billion to $20 billion, though the terms could still change in the coming weeks, Bloomberg reported. Some investors may be willing to obtain computing power in addition to, or some cases instead of, equity shares, the news service added.
The investment drive could bolster the startup’s efforts to create a global network of satellites to provide a backbone for global Internet connectivity. However, the company faces numerous challenges. For example, it has restricted access to its Starlink satellites in Ukraine multiple times during the war with Russia, leading to battlefield confusion and concerns about a backdoor for Russian intelligence operations.
Despite those concerns, some experts believe the venture is poised for success in an industry with enormous growth potential. According to an industry report, the market for AI-powered technologies is expected to grow from $4.8 trillion this year to $29 trillion in 2029. This includes technologies that automate tasks, reskill workers, and support human augmentation. Technology is expected to boost productivity and wages globally as it improves and becomes cheaper.