xAI Raises $6bn in Funding Round, Pre-Money Valuation Hits $18bn

xAI, the 10-month-old competitor to OpenAI founded by Elon Musk, is raising a staggering $6 billion in its latest funding round. 

This funding round is said to value the company at $18 billion, according to TechCrunch's report on Friday. 

The deal, which is expected to close in the coming weeks, would grant investors a quarter stake in the company. 

However, the terms of the deal have already undergone adjustments. Initially, xAI was reportedly seeking to raise $3 billion at a pre-money valuation of $15 billion. However, due to overwhelming demand from investors, the figures were swiftly revised upwards. 

According to the report, the investors including Sequoia Capital and Future Ventures, co-founded by Musk's longtime friend Steve Jurvetson, are participating in the funding round. 

Other participants are likely to include Valor Equity Partners and Gigafund, both of which have close ties to Musk. 

Interestingly, the exact composition of the investors in the deal remains somewhat opaque. 

Reportedly, commitments were gathered through exclusive Zoom calls with Musk and other key figures from xAI, making it unclear to some investors who else is involved in the deal. 

xAI's ambitious vision aims to bridge the gap between the digital and physical worlds by leveraging data from Musk's various companies, including Tesla, SpaceX, Boring Company, and Neuralink. 

Musk plans to integrate xAI's technologies into his other ventures, such as Tesla's self-driving cars and humanoid robots. 

Meanwhile, Musk's social media platform, X, has already integrated xAI's chatbot, Grok, as a paid add-on. 

This integration is seen as just the beginning of a broader strategy to create a symbiotic relationship between X and xAI. 

The implications of xAI's rapid growth for its competitors, particularly OpenAI, remain to be seen. 

Musk has been a vocal critic of OpenAI, even going so far as to open source xAI's earliest chatbot, Grok-1, as a direct challenge to OpenAI's closed approach to AI development. 

As xAI continues to gain momentum and funding, its impact on the AI landscape is likely to be profound, with potential ramifications for both industry incumbents and newcomers alike.