Elon Musk, a tech businessman known for his innovative companies, aims to secure approximately $4 billion in funding for his new artificial intelligence venture, xAI. This up-and-coming firm is behind the creation of Grok, an advanced AI chatbot that utilizes the X-linked technology.
Some investors have been given the opportunity to invest in the AI startup’s funding rounds using special purpose vehicles (SPVs), as mentioned in an email to prospective investors.
Through an SPV structure, multiple venture capital companies and investors can pool their resources for investment. Reports indicate that establishing such structures comes with initial fees of up to 5%, in addition to ongoing management fees and interest costs.
Reports indicate that Musk aims to secure between $3 billion and $4 billion in new funding for the company. If successful, this investment round could value the business at approximately $18 billion. The company intends to finalize this funding within the next 2-3 weeks on a first-come, first-served basis.
In March 2023, Musk established xAI with its base located in the San Francisco Bay Area, California. The company debuted in July of the same year. xAI aspires to unravel the deepest mysteries of the universe.
In November, the company introduced its initial product, asserting that their X-linked chatbot named Grok is capable of surpassing ChatGPT’s performance.
In simpler terms, the email is believed to have showcased compelling reasons for investors, such as Musk’s success with Tesla and the AI model being trained using data from Musk’s social media platform X.
Mario Nawfal, entrepreneur and angel investor, expressed his concerns in response to the news. With vast amounts of money pouring into AI startups and valuations reaching new heights, he warned about the potential danger of an AI bubble emerging due to escalating investments and significant development costs.
On their website, it is stated that xAI’s internal AI instructors come from various academic backgrounds and are responsible for generating and managing top-notch data for xAI’s model development and assessment.
In March, Musk announced that xAI would be releasing its open-source AI chatbot to compete against ChatGPT’s closed model from OpenAI.
Despite having a multibillion-dollar valuation, xAI continues to operate as a small startup with a team of only 10 full-time engineers and an estimated 5,000 to 10,000 GPUs, based on available reports.
CryptoMoon reached out to xAI for further details but did not receive an immediate response.
In the bustling AI chatbot industry, Grok faces competition from various notable players including OpenAI’s ChatGPT, Antropic’s Claude, Microsoft’s Copilot, Google’s Gemini, and Meta AI (formerly of Facebook).
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2024-04-12 08:40