Musk Pushes to Raise $1 Billion Funding for xAI, 'OpenAI Rival'

Elon Musk. [Photo by AFP Yonhap News]

Elon Musk, CEO of Tesla and the AI startup xAI, which declared itself as the "rival to OpenAI," has launched a new funding round worth approximately 1.3 trillion KRW.

According to Bloomberg and other sources on the 5th (local time), xAI disclosed to the U.S. regulatory authority, the Securities and Exchange Commission (SEC), that it is pursuing new funding of up to $1 billion (about 1.3 trillion KRW). According to the documents submitted to the SEC, xAI has already raised $134.7 million from four investors. xAI explained, "The first stock sale was completed on the 29th of last month, and binding agreements with investors have been signed regarding the remaining stock sales."

This new funding round comes amid the accelerating AI dominance competition among big tech companies. Since OpenAI's ChatGPT debuted on November 30 last year, global big tech companies such as Microsoft (MS), Google, Meta, Apple, and Amazon have launched generative AI services within just eight months. Musk joined the AI race late by launching the AI company xAI in July.

xAI recently unveiled the chatbot "Grok," which is available on the social media platform X operated by Musk, stepping up its pursuit. Grok is based on xAI's large language model (LLM) Grok-1. According to xAI, Grok-1 surpassed the capabilities of ChatGPT's GPT-3.5 within four months of development.

Earlier, Musk announced that investors in X would own 25% of xAI's company shares. However, he did not specify the details regarding the method of acquiring these shares.

Shortly after founding xAI in July, Musk stated, "Current AI development involves indiscriminately training on vast amounts of data, but this approach will not succeed," emphasizing energy efficiency as a differentiating point. He was a founding member of OpenAI, which sparked the global generative AI craze with ChatGPT, but left OpenAI in 2018, three years after its founding, due to differences in AI development direction.