Elon Musk has refuted the accuracy of a Bloomberg report suggesting that his artificial intelligence (AI) firm, xAI, has secured $500 million of its $1 billion target from investors. Responding to a post on X (formerly Twitter), Musk stated that the information is "not accurate." Bloomberg's article indicates that xAI is currently in discussions regarding a valuation between $15 billion and $20 billion, a figure that may be subject to adjustment in the coming weeks. Musk and investors are reportedly working towards a settlement and exploring the potential acquisition of computing power alongside, or instead of, an equity stake in xAI.
In November 2023, Musk outlined that equity investors from X would receive a 25% stake in xAI. This implies that investors are encouraged to contribute at least 25% of their X investment in xAI. For instance, if an investor commits $10 billion to X, they are invited to invest $2.5 billion or more in xAI. Founded by Musk in 2023 as an alternative to OpenAI due to philosophical differences, xAI's chatbot, Grok, draws power from X's social media content.
xAI has initiated a private placement to sell $865.3 million in unregistered equity securities, according to a filing with the U.S. Securities and Exchange Commission dated December 5, 2023. The Form D filing specifies that these securities will be sold to accredited investors, subject to resale restrictions outlined in Rule 506(b). As of the filing date, $134.7 million worth of securities had already been sold, with the first sale occurring on November 29, 2023.
