Elon Musk's AI modeling firm, xAI, has finalized a private agreement to sell unregistered equity securities amounting to $865.3 million, as indicated in a filing submitted to the U.S. Securities and Exchange Commission (SEC) on December 5.
The filing, known as a Form D, allows xAI to conduct private sales of securities without the requirement for registration, in compliance with Regulation D under the Securities Act of 1933. Musk is identified in the form as an executive officer and director of the company.
The specifics outlined in xAI's Form D note that the securities are intended for accredited investors, with limitations imposed on their resale under Rule 506(b). As of the filing, $134.7 million worth of such securities have already been sold, with the initial sale occurring on November 29. The company aims to raise a total of $1 billion.
xAI's flagship product, a chatbot named Grok, is yet to be publicly unveiled, although a prototype exists with a waiting list for potential users. Described on its website as "a very early beta product," Grok is portrayed as a system capable of real-time understanding through the X platform, offering responses to complex queries that most other AI systems would typically reject.
Musk introduced xAI in July, highlighting its ambition to "understand the universe." He asserted that Grok would outperform ChatGPT. In November, Musk engaged in an online dispute with Sam Altman, the co-founder and CEO of OpenAI (the entity behind ChatGPT), over the comparative capabilities of their respective AI systems. Musk was also a co-founder of OpenAI before departing from the organization.
