Elon Musk’s artificial intelligence startup, xAI, is seeking to raise $1bn (£0.8bn) as the world’s richest man tries to keep pace with rivals including OpenAI, Microsoft and Google in the race to dominate the field.
The company has already raised $135m (£107m) from investors and is seeking a total of $1bn in equity financing, according to a filing with the US Securities and Exchange Commission.
In spite of the filing, Musk tweeted on Wednesday: “We are not raising money right now.”
The race to develop generative AI – products that generate convincing text, image and audio from simple prompts – has intensified as Silicon Valley’s biggest companies battle for supremacy after the release of OpenAI’s ChatGPT in November last year.
After the sensational impact of that chatbot, Microsoft announced a deepening of its partnership with OpenAI in January backed by a $10bn investment.
Musk, the chief executive of Tesla and SpaceX and the owner of the X platform formerly known as Twitter, was one of OpenAI’s co-founders in 2015 but left three years later. In July, Musk launched xAI and last month the company released its first AI model, a chatbot with a “rebellious streak” called Grok.
Grok will be made available to certain premium subscribers on X. Last month, Musk said that investors in the platform would own 25% of xAI. However, the billionaire has also warned that AI could be “one of the biggest threats to humanity”.
Amazon has also entered the AI race, announcing in September that it is to invest up to $4bn in the startup Anthropic, which has created its own generative AI chatbot called Claude.
Anthropic is one of the main competitors to OpenAI in the fledgling, but booming, AI sector. Last year, Google invested $300m in Anthropic and the company said it would train its models on Google’s chips and use its cloud services.
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In June, another rival, the year-old Silicon Valley-based Inflection AI, raised $1.3bn in funding led by Microsoft and Nvidia.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
