The artificial intelligence company xAI, owned by billionaire Elon Musk, has secured commitments amounting to $500 million from investors to achieve a goal of $1 billion, according to a report published by Bloomberg agency.
The company is discussing an evaluation ranging from 15 billion dollars to 20 billion dollars, although the conditions may change in the coming weeks.
Elon Musk launched his start-up last year as an alternative to Open AI, a company he co-founded but later left due to philosophical differences on how to utilize technology.
The first product of xAI, an artificial intelligence chatbot named Grok, was developed using posts from the social media platform X owned by Musk as a basis.
This allows the chatbot Grok to access up-to-date data when responding to users, compared to other chatbots.
It is likely that the investors of both companies will also overlap. Elon Musk has received support from Larry Ellison, Sequoia Capital, Andreessen Horowitz, and Fidelity regarding his $44 billion acquisition deal of Twitter.
In November, Musk stated that investors in X will own 25 percent of XAI.
Practically speaking, this means that these investors are expected to invest 25 percent of the amount they invested in X in xAI.
If they invest 10 billion dollars in X, it means they are required to invest 2.5 billion dollars or more in xAI.
It is expected that Musk and investors will finalize the conditions in the next two weeks.
Some parties are considering the possibility of obtaining computer power in addition to XAI shares, while others are considering obtaining computer power instead of XAI shares.
Computer power is beneficial for investment companies that require intensive data processing in order to develop new artificial intelligence products.
In a related context, Elon Musk denied a report by Bloomberg, explaining that the report stating that his artificial intelligence company, xAI, received commitments of $500 million from investors to achieve a goal of $1 billion is not accurate.
In response to a user on the social media platform X, he stated, “These pieces of information are not accurate.”
In December of last year, Masik referred to his artificial intelligence company stating that it does not raise money, this came after one day of the startup company submitting a request to the US Securities and Exchange Commission to raise a billion dollars through the sale of shares.
