Musk xAI Nears Successful $6 Billion Fundraising

Major Investor Who Invested $800 Million in Twitter Joins

Elon Musk, CEO of Tesla, is leading the artificial intelligence (AI) startup xAI, which has nearly succeeded in raising its target funding of $6 billion (approximately 8.26 trillion KRW).

On the 25th (local time), major foreign media including Bloomberg News cited sources familiar with the matter, reporting that "xAI is close to achieving its $6 billion fundraising goal" and that "the company's valuation is estimated to reach $18 billion (approximately 24.78 trillion KRW)."

[Image source=Reuters Yonhap News]

The fundraising attracted attention as Sequoia, a well-known venture capital firm in Silicon Valley, is reportedly participating in the investment. Sequoia is one of the companies Musk has been pursuing funding from for several months. The exact amount of Sequoia's investment in xAI has not been disclosed. However, considering Sequoia's past investment of $800 million in Twitter, there is speculation that they likely made a substantial investment in this round as well. Sequoia is also known as an early investor in Google, YouTube, and Apple. In recent years, it has supported Musk's projects such as the tunnel excavation business 'The Boring Company' and the commercial spaceflight venture 'SpaceX.'

Last July, Musk explained the background of founding xAI by saying, "OpenAI, which I co-founded with Sam Altman and others, has lost its original purpose and is pursuing profit through ChatGPT." He added, "I want to develop a 'truth-seeking AI' that tries to understand the nature of the universe." Since then, he has reportedly been focusing on improving the performance of xAI's chatbot Grok by hiring engineers and researchers from Tesla to support xAI.

Major foreign media noted, "Building and training large language models (LLMs) require enormous computing power and expensive hardware," and evaluated that "Sequoia's support will also empower Musk to catch up with competing AI startups like OpenAI and Anthropic, as well as big tech companies such as Meta and Google."

Meanwhile, xAI's biggest competitor, OpenAI, has raised $13 billion from Microsoft, and Anthropic is reported to have received $2 billion and $4 billion from Google and Amazon, respectively.