Musk’s xAI raises $15 billion in latest funding round
Elon Musk’s artificial intelligence company xAI has raised $15 billion from investors, sources familiar with the matter told CNBC’s David Faber.
Musk later called the news “False” in a post on the social media platform X.
The financing adds $5 billion to the $10 billion investment that CNBC reported in September, which valued the startup at $200 billion. Sources told CNBC that most of the money will fund graphics processing units that support large language models.
AI startups have reached sky-high valuations in recent months as they raise large amounts of capital to meet the seemingly endless demand for basic models.
Artificial intelligence startup Anthropic in September closed A $13 billion financing round that roughly tripled its valuation in March.
Sam Altman’s OpenAI closed a $6.6 billion stock sale in October at a $500 billion valuation. Last month, Reuters reported The ChatGPT maker was said to be gearing up for an IPO that could be valued at $1 trillion.
Musk’s artificial intelligence initiative has repeatedly sparked controversy, including the rapid construction of large, power-hungry data centers in Memphis.
According to local researchers, data centers use natural gas-powered turbines as an energy source, and emissions from these turbines contribute to air quality problems in the region.
XAI also makes a chatbot called Grok and recently launched a site called Grokipedia, which is intended to be an online encyclopedia to rival Wikipedia.
Both Grok and Grokipedia have faced widespread criticism over their creation and distribution wrong contentand, in some cases, anti-Semitic and other hate speech.
XAI acquired social network X this March in an all-stock transaction in a deal that valued the platform at $33 billion.
Musk’s automaker Tesla is also doing business with xAI.
Newer Tesla vehicles have Grok in their infotainment systems. Meanwhile, xAI purchased tens of millions of dollars worth of Tesla’s battery energy storage systems for use in data centers in Memphis.
Tesla held its annual shareholder meeting and proxy vote last week. Investors voted to approve a CEO pay plan for Musk that could net nearly $1 trillion in Tesla shares over the next decade, depending on what milestones the company reaches.
There was also a shareholder proposal for proxy voting that would allow Tesla to invest in xAI. There were not enough votes in favor of the xAI investment for the Tesla board to reach any agreement.
Brandon Ehrhart, Tesla’s general counsel and corporate secretary, said at the annual meeting that the company was “evaluating next steps on the matter.”
