According to the latest report from the Financial Times today, Musk’s startup xAI is negotiating US$6 billion in financing. He is currently targeting a valuation of US$20 billion and wants to “showdown” with OpenAI. .
The report quoted people familiar with the matter as saying that xAI has been courting wealthy people and investors around the world in recent weeks. Four people familiar with the matter said that Musk is still seeking investors from Hong Kong, China, and talks have been held in the family offices of these investors.
Three other people familiar with the matter said Musk hopes to raise as much as $6 billion in new equity for xAI at a proposed valuation of $20 billion.
Negotiations are ongoing, with the Tesla and Company X chief still testing investors’ appetite for such huge sums of money. The scale of the fundraising reflects the enormous cost of developing generative AI tools— requiring huge amounts of computing power, massive amounts of data, and cutting-edge chips.
xAI rival OpenAI has raised about $13 billion from Microsoft alone. Other startup AI companies such as Anthropic and Cohere have also raised billions of dollars from Google, Amazon and top Silicon Valley venture capital groups.
According to previous reports, Bloomberg said on January 20 that xAI had received an investment commitment of US$500 million . xAI was discussing a valuation of US$15 billion to US$20 billion , and the terms may still change in the coming weeks. However, later that day, Musk responded that “this is Bloomberg’s fake news.”