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Elon Musk’s AI startup xAI struggling to raise money to compete with OpenAI?

Published:

Apr 12, 2024 09:07 AM IST

The terms and dollar values of the funding round are still unknown and could change, the report claimed.

Elon Musk’s AI startup X.AI Corp. is seeking to raise $3 billion to $4 billion in a deal that would value the company at $18 billion, as per materials sent to investors, Bloomberg reported. The roughly 20-page pitch deck has been circulated among Silicon Valley’s venture investing community, the report added.

Tesla, X (formerly known as Twitter) and SpaceX's CEO Elon Musk attends the AI Safety Summit at Bletchley Park in Bletchley, Britain.(Reuters)
Tesla, X (formerly known as Twitter) and SpaceX’s CEO Elon Musk attends the AI Safety Summit at Bletchley Park in Bletchley, Britain.(Reuters)

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Even people who are close to Elon Musk “have have had conversations within their own networks to gauge interest in participating in the deal”, a person in the know told Bloomberg.

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How will the funding round go about?

The terms and dollar values of the funding round are still unknown and could change, the report claimed. Although some details of the same were reported by The Wall Street journal earlier.

Read more: Cathie Wood’s Ark Investment Management announces stake in Microsoft-backed OpenAI

What does the pitch deck show about Elon Musk?

The pitch deck focuses on potential selling points for investors, It also boasts Elon Musk’s track record at Tesla Inc. and Space Exploration Technologies Corp. As per the pitch deck, xAI will be able to train on the high-quality data from Elon Musk’s social network X.

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This could bode well for the company as having access to data is crucial for building large language models that power AI chatbots. This comes as xAI aims to compete with other well-funded businesses such as Microsoft-backed OpenAI.

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