The investor-backed valuation of Elon Musk's xAI company reaches $24 billion.
xAI revealed that Sequoia Capital, Andreesen Horowitz, and Saudi Prince Alwaleed Bin Talal participated in the second-round funding, according to a blog post on Sunday.
Elon Musk, xAI's founder who set up the company in July last year, announced on X on Monday that "more will be revealed in the upcoming weeks" and disclosed the startup's pre-funding valuation of $18 billion.
The company stated in its post that the fresh funds would aid in market expansion for their first products, advanced infrastructure development, and a speedy research and development of future technologies.
xAI is readying itself to rival another major player in the AI industry, OpenAI (responsible for the acclaimed chatbot ChatGPT). Musk is a founding member of OpenAI but stepped down as chairman six years ago due to certain disagreements concerning its route.
xAI announced in November that they were working on an AI chatbot, Grok, for paying users of X - an ex-Twitter renamed social media platform owned by Musk. Musk mentioned on X at the time that Grok was gaining real-time access to information on the platform to train the chatbot.
Soon after, Grok 1.5 versions with advanced long context and image functionality were released by xAI. The startup is currently in the process of hiring engineers and researchers in Palo Alto, San Francisco, and London.
A wave of investors, captivated by the transformative potential of AI, have been pouring vast amounts of money into AI companies lately.
Microsoft (MSFT) has amassed the largest stake in OpenAI with its $13 billion investment, and Amazon (AMZN) has pledged to invest up to $4 billion in Anthropic AI in exchange for a chunk of the company's ownership.
Bringing AI products to market is still a daunting task, even for the giants of the industry.
Google hid behind the curtains this month to unveil an AI-generated summary search tool, condensing search results for instantaneous answers. However, the feature was met with intense criticism for providing inaccurate or misleading information, which led to a swift retraction by Google.
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The tech industry is seeing a surge in investment as companies like xAI, with a valuation of $24 billion, attract funding from notable firms such as Sequoia Capital and Andreesen Horowitz. To further leverage these funds, xAI is focusing on expanding its market, developing advanced infrastructure, and accelerating research into future business technologies.
Source: edition.cnn.com
