Musk: xAI needs a “proper value”
Elon Musk is looking to put “proper value” on his artificial intelligence startup xAI, sources told CNBC‘s David Faber during an investor call last week. The Tesla CEO did not explicitly address an upcoming funding round, but sources interpreted his comments as a sign that xAI is preparing for a significant capital raise.
The comments came as xAI discussed revenue at a potential run rate of $1 billion or more during the call, sources familiar with the matter told Faber. CNBC was unable to confirm whether the company is actively pursuing a funding round.
This development follows a report from November that xAI was raising up to $6 billion at a $50 billion valuation to purchase 100,000 Nvidia chips. The funding was reportedly a combination of $5 billion from Middle East sovereign funds and $1 billion from other investors.
xAI was announced in July 2023 with the goal of “understanding the true nature of the universe.” The company launched a chatbot called Grok last year, which it claimed had been trained in two months with real-time internet knowledge. xAI aims to compete against other AI chatbots, including Anthropic’s Claude and ChatGPT maker OpenAI, which Musk co-founded before leaving in 2018.
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In March, Musk announced that xAI had merged with social media platform X in an all-stock deal, valuing the combined entity at $80 billion. Musk stated that X had been valued at $33 billion, and noted that “xAI and X’s futures are intertwined.”
Musk’s recent focus on the Department of Government Efficiency has raised questions about the stability of his companies, with Tesla shares falling over 40% this year. His presence on the xAI investor call may signal a renewed focus on his business entities.