Elon Musk reportedly on the verge of raising billions for his AI company
Elon Musk's OpenAI competitor is getting ready to raise some big money from Silicon Valley.
According to new, anonymously-sourced reports from The Information and TechCrunch, Musk's AI company xAI is currently raising $6 billion on a $18 billion pre-money valuation, and the deal is expected to close in a matter of weeks.
Musk's ten-month-old AI company is looking to take OpenAI on directly after Musk openly criticized and feuded with the AI giant that he helped create. Musk has long ragged on OpenAI's change in ethos, criticizing the company's move from an open, nonprofit model to a more secretive, profit-seeking approach.
According to reports, Musk and associates have been pitching xAI to investors as an AI brand that will one day integrate with Musk's various companies like Tesla, SpaceX, The Boring Company, and Neuralink. TechCrunch reports that the pitch claims that xAI will be different from other AI companies because it will "master the physical world." The pitch says that one day xAI will train on the data from all of Musk's companies and then be able to aid Tesla in creating (still nonexistent) full self-driving cars and its (still underdevelopment) robot Optimus.
It should come as no surprise if Musk has no problem raising big money from tech venture capitalists. Musk has many friends in Silicon Valley, and even though his reputation has taken hits recently, sympathetic VC firms have long been a feature of his support network. As TechCrunch notes, one of the participants in this round of funding is Future Ventures, which was co-founded by Musk's old associate Steve Jurvetson.
However, as xAI gets ready to raise billions, it's important to note that its only real product at this point is Grok, the AI chatbot integrated into Musk's social media company X, formerly known as Twitter. And, as Mashable and other outlets have reported, Grok isn't really any good. Just recently the AI chatbot could not tell the difference between real news and a joke, and reported a humorous post as actual legitimate news. Grok also recently made up a fake story about Iran striking Tel Aviv with missiles, which X then promoted to its hundreds of millions of users.
But, regardless of Grok's failures, Musk is utilizing the hype around xAI to bail X out. According to TechCrunch, X owns a stake in xAI, so the social media company, which has seen revenue fall off a cliff under Musk's ownership, will profit from...whatever happens with xAI.