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Elon Musk’s artificial intelligence company xAI just raised $6 billion from heavyweight investors such as Andreessen Horowitz, Sequoia Capital, and even a Saudi prince.
The OpenAI competitor, which developed its own chatbot, Grok, announced its Series B funding round Sunday, which has pushed the company to a $24 billion valuation. It was previously expected to reach an $18 billion valuation after closing the current round.
XAI, which was announced last July, joins other AI companies raising millions and seeing their valuations reach billions amid a boom in the industry. Its staff includes AI talent from DeepMind, OpenAI, Google Research, Microsoft Research, as well aa other large language model (LLM) and machine learning researchers.
The company listed Saudi Arabian investor Prince Alwaleed bin Talal as one of its Series B backers, as Saudi Arabia is reportedly working with U.S. financiers, including Andreessen Horowitz, to invest $40 billion in AI technology.
Other key investors in the multi-billion dollar round include Valor Equity Partners, Vy Capital, Fidelity Management & Research Company, and Kingdom Holding, according to xAI. Manhattan Venture Partners is also an investor, according to Crunchbase.
In March, Musk said xAI would open-source its ChatGPT rival, Grok, after suing his former company OpenAI the month before. Musk co-founded OpenAI with chief executive Sam Altman, who he is also suing, in 2015, before leaving in 2018 over disagreements with leadership. In his lawsuit, Musk alleged that OpenAI’s multi-year, multi-billion dollar partnership with Microsoft betrays its founding commitment of putting benefits to humanity over profit.
The lawsuit claims a breach of contract, breach of fiduciary duty, and unfair business practices. Musk asked that the company be ordered to open its research and technology to the public, and requested Altman give up money from the alleged illegal practices.