Musk’s XAI approaches closing deal, valuing startup at US$24 billion

(Bloomberg) — Elon Musk’s artificial intelligence startup X.AI Corp. is expected to complete a funding round in June that could value the company at more than $24 billion, including its latest cash influx, according to a person familiar with the business.

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The company was scheduled to complete a financing of about $6 billion earlier this month, but a final closing has yet to happen on the deal, which has been in the works since last year. More recently, the company has been seeking up to $6.5 billion and aims to get closer to that goal in the coming weeks, said the person, who asked not to be identified because the information is not public.

Musk did not immediately respond to an emailed request for comment.

xAI’s funding ambitions have expanded dramatically since Bloomberg reported in January that the company was trying to raise $1 billion. Negotiations on a deal have been protracted, the person said.

The startup, a rival to OpenAI, was marketed to a series of Silicon Valley investors through a presentation that touted Musk’s track record at Tesla Inc. and SpaceX, Bloomberg News previously reported. The pitch materials also noted that xAI and its chatbot, Grok, will be able to make use of high-quality data from X, Musk’s social platform formerly called Twitter. Having access to data is crucial for building large language models, the technology that powers AI chatbots, an area where xAI aims to compete with other well-funded companies such as OpenAI.

The deal will give xAI a pre-money valuation of $18 billion, a metric that does not include dollars raised. The Financial Times previously reported some details of the deal.

On Thursday, Musk spoke in a remote interview at the Viva Technology conference in Paris about xAI’s goal of being “as truth-seeking as possible.” He criticized other AI models developed by Google and Alphabet Inc.’s OpenAI as “favoring” political correctness. He added that another goal of xAI is to “try to be the funniest AI.”

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