Elon Musk's xAI startup seeks to raise $1 billion from equity investors

By Kurt Wagner
 

Elon Musk’s artificial intelligence company xAI is seeking to raise $1 billion in funding from equity investors, according to a new filing. 
 

Musk has already raised nearly $135 million, according to a document filed Tuesday with the Securities and Exchange Commission, which doesn’t include the names of investors. Axios earlier reported on the filing. 

Musk created xAI earlier this year to try to compete with other generative AI companies, including OpenAI, where Musk was a co-founder. The company has debuted one product, a chatbot called Grok, trained on data from the X social network, which Musk also owns. It is “designed to answer questions with a bit of wit and has a rebellious streak,” according to the company website.

 

In November, Musk said that equity investors in X, formerly called Twitter, will own 25% of xAI. He also said that users of the social network who sign up for Premium+, a subscription priced starting at $16 per month in the US, will get access to Grok.

Musk has frequently and publicly criticised OpenAI, the highest-profile AI startup and developer of ChatGPT, since he left its board in 2018, especially after it created a for-profit arm the following year. He has said he believes it to be “effectively controlled by Microsoft.” Microsoft Corp. has invested some $13 billion into OpenAI.

Despite his work in AI, Musk has expressed deep reservations about the technology. The billionaire was among a group of researchers and tech industry leaders who in March called for developers to pause the training of powerful AI models. 

During the recent ouster and reinstatement of OpenAI’s CEO, Sam Altman, Musk said he wanted to know the reason he was fired, in case the board had discovered something dangerous about the AI. “I don’t think it was trivial,” he said at the DealBook conference last week. 

Musk, 52, oversees six companies: Tesla, SpaceX, X, Neuralink, Boring Co. and xAI.

ByteDance offers to buy back $5 bn shares from investors

TikTok owner ByteDance is offering to buy back around $5 billion worth of shares from investors at a price that will value the company at about $268 billion, two people familiar with the matter said on Wednesday. The Chinese technology giant is offering to buy the shares at $160 each, the same price it offered employees last month. One of the sources said the $268 billion valuation was about 10 per cent lower than its value a year ago when it conducted a share buy back plan for investors. 
 

The South China Morning Post first reported the news earlier on Wednesday. ByteDance did not immediately respond to a request for comment. Sources declined to be identified as they  were not authorised to speak to the media.