Elon Musk is set to become rivals with Chat GPT, Meta AI, Open AI, Google, and Microsoft, as his xAI secured a $6 billion investment to bolster its capacity.
In a statement posted on its website, the startup announced that the funds from this round would be used to bring xAI’s first products to market, build advanced infrastructure, and accelerate the research and development of future technologies.
According to xAI, investors in the Series B funding include Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity, Prince Alwaleed Bin Talal, and Kingdom Holding.
With the new funding, the company announced it is now hiring for numerous roles and seeks talented individuals ready to join “a small team focused on making a meaningful impact on the future of humanity.” The company said it is recruiting several engineers to fill roles in its Palo Alto, San Francisco, and UK offices.
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The company said it plans to deploy the funds from the new financing round to take its first set of products to market, build advanced infrastructure, and accelerate the research and development of future technologies,
“xAI will continue on this steep trajectory of progress over the coming months, with multiple exciting technology updates and products soon to be announced. xAI is primarily focused on the development of advanced AI systems that are truthful, competent, and maximally beneficial for all of humanity. The company’s mission is to understand the true nature of the universe,” it said.
In 2023, Musk formed xAI and released its chatbot Grok 1.0 model in November to rival OpenAI’s ChatGPT. Later, the company made the model available through a chatbot to Premium+ users, who pay $16 a month on X. In April, the company released the new Grok 1.5 model and also allowed Premium users on X to access the chatbot.
According to Musk, Grok leverages “real-time access” to information on X, and, like ChatGPT, the model has internet browsing capabilities, enabling it to search the web for up-to-date information about specific topics.
Musk and AI
Musk is one of the earliest investors in AI technology and he co-founded OpenAI. He has, however, been a major critic of OpenAI since he severed ties with the company. In March this year, he sued OpenAI and its co-founder Sam Altman for allegedly betraying its mission statement by turning the company into a profit-making venture.
The billionaire claimed that OpenAI co-founders, Altman and Greg Brockman, had convinced him to help found and bankroll the startup in 2015 with promises it would be a non-profit focused on countering the competitive threat from Google.
Meanwhile, competition in the AI space is getting stiffer as the players as the players are rolling out new products to increase their market share. Just recently, Google announced new upgrades to its Gemini Pro 1.5 model, which gives the Google flagship chatbot the ability to make sense of a massive amount of data.
Google’s AI updates announcement came a day after its main rival, OpenAI, also announced ChatGPT-4o, an updated version of ChatGPT-4.
According to OpenAI, the new large language model trained on vast amounts of data from the internet will be better at handling text and audio and can work with 50 languages.
Startups in artificial intelligence have resisted the current funding downturn in tech, with investors seeing opportunities for specialist AI applications in sub-sectors such as defense.
According to Stanford’s Institute for Human-Centered Artificial Intelligence, funding for AI startups reached $25.2bn in 2023, nearly nine times the investment in 2022 and about 30 times the amount in 2019.
Investors are looking for AI startups that challenge the status quo, develop better solutions, and drive real human progress.
They prioritize factors such as market approach, team, technology, and execution planning when evaluating AI investments.
