Elon Musk denies Financial Times report of xAI’s $6 billion fundraise; “xAI is not raising capital,” Musk says

Earlier today, we covered a story first reported by the Financial Times (FT) that Elon Musk’s AI startup X.AI is seeking to raise $6 billion in funding with a suggested valuation of $20 billion. However, Musk has now contradicted this report.

Shortly after the news made headlines, Musk refuted the FT report and shot down the funding claims, stating that X.AI is not currently in the process of raising new funds. In a post on X (formerly Twitter), Tesla CEO and the world’s richest person said:

“xAI is not raising capital and I have had no conversations with anyone in this regard.”

xAI is not raising capital and I have had no conversations with anyone in this regard https://t.co/KyjeqnW9eu

— Elon Musk (@elonmusk) January 26, 2024

Renowned for its comprehensive coverage of financial and business affairs, the Financial Times reported that sources close to the ongoing discussions told the media outlet that the xAI has been in talks with family offices in Hong Kong and is targeting sovereign wealth funds in the Middle East for investment. Additionally, Elon Musk has been in contact with potential investors in Japan and South Korea, FT reported.

Interestingly, this isn’t the first instance where Musk has refuted claims about xAI raising funds. Just last week, he dismissed a report stating that xAI had already secured $500 million in commitments toward its $1 billion funding target.

If the $6 billion funding is secured, it would significantly surpass xAI’s initial $1 billion goal, as indicated in a filing with the U.S. Securities and Exchange Commission the previous month. While xAI’s $20 billion valuation would be a fraction of OpenAI’s, it aligns with other peers like Google-backed Anthropic.

Musk launched xAI in July with the ambitious aim of unraveling the mysteries of the universe. The team behind xAI comprises experts from esteemed institutions such as Google’s DeepMind, OpenAI, Google Research, Microsoft Research, Tesla, and other renowned AI research firms. Their collective expertise has contributed to groundbreaking projects like DeepMind’s AlphaCode and OpenAI’s cutting-edge chatbots, including GPT-3.5 and GPT-4.

Meanwhile, Musk appears to be positioning xAI as a direct competitor to established players in the field, such as OpenAI, Google, and Anthropic, known for their development of influential chatbots like ChatGPT, Bard, and Claude.

Musk also co-founded OpenAI back in 2015, but he distanced himself from its board in 2018. Over time, he voiced criticisms of Big Tech’s AI initiatives and concerns about censorship. Earlier this year, Musk announced plans for a truth-oriented AI designed to grasp the fundamental truths of the universe, setting the stage for competition with Google’s Bard and Microsoft’s Bing AI.