Musk Denies $500M Investment in xAI Amid Valuation Discussions

Elon Musk X Twitter

According to Bloomberg, Elon Musk and investors are in talks to finalize terms in the coming weeks. The discussions revolve around the potential acquisition of computing power, either in addition to or instead of xAI equity shares.

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Elon Musk refuted a report that claimed his AI company, xAI, had secured $500 million from investors for a $1 billion target. Responding to a user’s post on X (formerly Twitter), Musk stated, “This is not accurate,” in reference to the Bloomberg article.



xAI Valuation Talks and Investment Plans: Insights

Sources reported by Bloomberg indicate that xAI, the AI startup, is engaged in discussions regarding a valuation ranging from $15 billion to $20 billion, with potential adjustments anticipated in the coming weeks.

Elon Musk and investors are said to be planning to finalize terms in the coming weeks. Discussions are ongoing, exploring the possibility of obtaining computing power alongside or as an alternative to xAI equity shares.

In November 2023, Musk outlined that equity investors in X would hold a 25% ownership stake in xAI. This signifies that these investors are encouraged to invest at least 25% of their X investment amount into xAI. For instance, if they invested $10 billion in X, they are invited to invest $2.5 billion or more in xAI, as reported by Bloomberg.

xAI: Origin, Funding, and Private Sale Overview

Elon Musk created xAI as an alternative to OpenAI last year due to differences in philosophy. xAI’s chatbot, Grok, uses social media content from X (formerly Twitter), Musk’s platform, providing more current responses than other chatbots.

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Recently, xAI, an artificial intelligence modeler, completed a private sale for $865.3 million in unregistered equity securities, as reported in a filing with the U.S. Securities and Exchange Commission on Dec. 5, 2023. The Form D specifies that these securities will be sold to accredited investors, subject to resale restrictions under Rule 506(b).

Notably, $134.7 million worth of such securities has already been sold, starting from Nov. 29, 2023. The company aims to reach a total funding of $1 billion through this initiative.


Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

 

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