According to a filing on Tuesday, Elon Musk’s artificial intelligence firm, xAI, has filed with the U.S. securities regulator to raise $1 billion in an equity offering. The company, which Musk created earlier this year, has already raised $134.7 million in equity financing from a total offering of $1 billion, as the filing with the Securities and Exchange Commission showed.
The SEC filing said that the offering is targeted exclusively at accredited investors under Rule 506(b) and comes with resale restrictions. The offering will open on Nov. 29 and is expected to close on Jan. 2.
XAI aims to be a leader in generative AI, which is designed to learn and adapt over time. Its team includes members of esteemed institutions such as Google’s DeepMind and Microsoft Research’s parent company. Musk has long been an advocate for developing safer AI. At a Twitter Spaces event this year, he discussed how he hopes xAI to create a “maximum truth-seeking” AI, eschewing explicit programming of moral codes into its systems.
Musk has previously invested in several AI startups, including high-profile generative AI company OpenAI. However, he has also expressed serious reservations about the technology, joining other tech leaders in calling for a pause on training powerful AI models in March. He also signed an open letter urging developers to be more transparent about the way they develop their applications.
Fundraising for AI remains a bright spot for startups this year, following the OpenAI launch of popular chatbot ChatGPT last year and the raising of $10 billion from its strategic backer, Microsoft Corp. But the sector is facing regulatory concerns over fears that the technology could be used to spread false information.
While xAIs IPO will put the company at a higher valuation than many of its rivals, it is not expected to be among the top five companies in this space. Analysts said the technology is still nascent and likely to generate significant revenues once deployed in more applications.
Besides seeking to raise capital, xAI plans to expand its team in the future and accelerate the development of its products. Currently, xAI has just one product, Grok, an AI chatbot launched in November and designed to answer questions with a “bit of wit and a rebellious streak,” according to the company website. Grok is available to subscribers of Xs social network Premium+, which starts at $16 per month in the U.S.
In November, Musk said that equity investors in X will hold a 25% stake in the new company and that users of the X social network will get early access to Grok. The startup is expected to unveil more details on the chatbot shortly. XAI will also integrate the bot into its social platform X and make it a standalone app. XAI has yet to release any details about its revenue projections.