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Elon Musk’s artificial intelligence rival to OpenAI is reportedly expected to reach an $18 billion valuation after it closes its current funding round.
The funding round for AI startup xAI hasn’t been finalized, but could close this week, Bloomberg reported, citing unnamed people familiar with the matter. xAI is expected to raise $6 billion in the round, which includes Sequoia Capital as an investor. Sources told Bloomberg the timing of the round and expected valuation could change.
xAI’s pitch deck includes details about Musk’s other businesses, Tesla and SpaceX, and says xAI would be able to be trained using data from the social media platform X, which Musk owns, Bloomberg reported.
Musk announced his AI startup in July. Its team includes AI talent from DeepMind, OpenAI, Google Research, Microsoft Research, and others companies that have done research on large language models (LLMs) and machine learning. In November, Musk said xAI was ready to release its first AI product to a select group of people.
In March, Musk made xAI’s rival to ChatGPT, the AI chatbot assistant, Grok-1, open-source. The month before, Musk sued OpenAI and its chief executive, Sam Altman, alleging its multi-year, multi-billion dollar deal with Microsoft was a betrayal to its founding commitment of benefiting humanity over profit. The lawsuit claimed a breach of contract, breach of fiduciary duty, and unfair business practices. Along with Altman, Musk was among the founders of OpenAI, which launched in 2015. Musk resigned from the company’s board in 2018 partly due to a conflict of interest.
“OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft,” Musk’s lawsuit said. “Under its new board, it is not just developing but is actually refining an [artificial general intelligence] to maximize profits for Microsoft, rather than for the benefit of humanity.”
OpenAI responded to the lawsuit with a blog post including emails showing Musk supported making OpenAI a for-profit company, and had pushed for it to merge with Tesla.