Investors in talks to help Elon Musk's xAI raise $3 billion: Report

Discussions are ongoing between investors closely linked to Elon Musk and xAI, his artificial intelligence startup, aimed at raising a significant $3 billion investment, according to a Wall Street Journal report. This potential funding round could skyrocket the valuation of xAI to a staggering $18 billion.

Among those contemplating backing this endeavour are the renowned venture capital firm Gigafund and Steve Jurvetson, as revealed by individuals familiar with the matter. The Wall Street Journal's sources also hinted at the involvement of a co-founder from another venture firm, although the specific identity of both the individual and the firm remains undisclosed.

While the terms of this fundraising initiative have yet to be finalised, and the plans are subject to potential alterations, recent discussions have reportedly gained considerable momentum, according to the Wall Street Journal.

This move by Musk comes as a strategic manoeuvre to offer a formidable alternative to industry giants like Microsoft-backed OpenAI and Alphabet's Google. xAI was inaugurated by Musk last year with the aim of pushing the boundaries of artificial intelligence.

Contrary to previous assertions, earlier this year, Musk stated that xAI was not engaged in discussions with investors regarding funding, refuting media speculations about the startup potentially securing up to $6 billion in investment. These conflicting reports have sparked ongoing interest and speculation in the technology and investment communities.

In January, the Financial Times disclosed xAI's pursuit of funding at a valuation of $20 billion, further fueling intrigue surrounding the startup. "At the present time, xAI is not actively seeking capital, and I have had no discussions regarding this matter," Musk firmly declared in response to the report.

March saw the unveiling of an upgraded version of xAI's chatbot, Grok, now known as Grok-1.5, posing a significant challenge to OpenAI's ChatGPT. The chatbot has been made accessible to select users of X (formerly Twitter).