TLDR: Musk Dismisses Reports of xAI’s $20 Billion Valuation Target

Elon Musk has denied reports that his artificial intelligence (AI) company, xAI, has raised $500 million. Musk took to social media to clarify that these reports are inaccurate and deemed them as “fake news.” The Bloomberg News story had claimed that xAI was halfway to its goal of $1 billion in funding and discussing a valuation of $15 billion to $20 billion.

xAI, launched by Musk in June, aims to bring together industry veterans in the field of AI and gain a better understanding of reality. In November, the company introduced its AI chatbot Grok, which has capabilities that rival Meta’s LLaMA 2 AI model and is able to handle math problems and reasoning at a level comparable to OpenAI’s GPT-3.5.

Sources familiar with the matter stated that Musk and investors are expected to finalize terms in the coming weeks. It is reported that some parties involved in the funding round are looking into obtaining computing power rather than equity shares in xAI, in order to support venture capital firms’ portfolio companies that require intensive data processing capabilities for their own AI products.

Last month, news of xAI’s $1 billion funding goal emerged from a company filing with the U.S. Securities and Exchange Commission. Musk has been vocal in his criticism of OpenAI, a prominent AI startup that developed ChatGPT. Though Musk was involved with the company initially, he has raised concerns over its establishment of a for-profit arm and its ties with Microsoft.

Musk, a signatory to an open letter published by the AI watchdog group Future of Life Institute, has been an advocate for caution in the development and use of AI. The letter urged the temporary cessation of training AI systems more powerful than GPT-4 and called for the careful management of AI systems to ensure their positive effects and mitigate potential risks.