Elon Musk denies AI startup has raised $500M of $1B goal

Billionaire Elon Musk denied a report that his artificial intelligence (AI) company, xAI, has secured commitments to put it halfway toward a $1 billion investment goal.

“This is simply not accurate,” Musk wrote on X, formerly Twitter, in response to a user’s post on the platform citing a report from Bloomberg News. 

Bloomberg had reported that xAI is discussing a valuation of $15 billion to $20 billion, according to people familiar with the matter, although those terms could change in the coming weeks. 

According to the report, Musk and investors are planning to finalize investment terms in the next few weeks and some parties are evaluating whether they can get computing power in addition to, or in some cases instead of, xAI equity shares.

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In December, xAI filed a document with the Securities and Exchange Commission (SEC) that indicated it was looking to raise $1 billion through an equity offering and over $134 million had already been sold. 

That document indicated xAi “has entered into a binding and enforceable agreement for the purchase and sale” of the approximately $865 million that remained to be sold.

Musk also pushed back on that report by writing in response to a post about the fundraising indicating that xAI wanted to compete with OpenAI and Anthropic, “We are not raising money right now.”

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In July, Musk launched xAI in response to AI initiatives at Big Tech companies, which he criticized for excessive censorship and insufficient safety measures. Musk co-founded ChatGPT-maker OpenAI in 2015 and stepped down from its board of directors in 2018. He stated at the time that he wanted to create a maximum truth-seeking AI that tries to understand the nature of the universe.

xAI is distinct from the X social media platform, although the two firms work closely together and xAI also works with Tesla.

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xAI announced in November that it launched a preview version of its “Grok” chatbot that aims to rival OpenAI’s ChatGPT and Google’s Bard. The company said Grok is “modeled after the Hitchhiker’s Guide to the Galaxy, so intended to answer almost anything and, far harder, even suggest what questions to ask! Grok is designed to answer questions with a bit of wit and has a rebellious streak, so please don’t use it if you hate humor!”

The company made the Grok chatbot available to X Premium+ subscribers in the U.S. in December. It later rolled out the AI tool’s availability to subscribers who live in Australia, Canada and India, among more than a dozen other countries.

Larry Ellison, co-founder of Oracle and a close friend of Musk, said in September that xAI signed a contract to train its AI model on Oracle’s cloud.

FOX Business’s Breck Dumas and Reuters contributed to this report.