Musk-like investors plan $3 billion funding round for xAI

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Investors linked to Elon Musk are reportedly planning a $3 billion funding round. xAI.

This era will value artificial intelligence (AI) firms. At $18 billionThe Wall Street Journal (WSJ) reported on Friday (April 5), citing sources familiar with the matter.

Venture capital company GigaFund and Steve Jobson, a prominent Musk backer and co-founder of another venture firm, are among investors considering participating in the funding round, sources told the WSJ.

According to the report, Jurvetson is a longtime friend of Musk and a board member of his rocket company SpaceX. He was also a director at Tesla. And Gigafund was co-founded by another SpaceX director, Luke Nosek, who – like Musk – was part of the “PayPal Mafia”, which founded the payments company.

The funding round follows major fundraising efforts in recent months by AI firms, such as Microsoft. 13 billion dollar investment I Open AIcreator of ChatGPT. BushraOpenAI’s chief competitor, has picked up Over $6 billion.

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The WSJ report notes that some investors are skeptical that xAI — which launched in July — has enough time to compete with other leading AI companies.

xAI launched its own Grok Chatbot. In November, it was made available on Musk’s social media platform X. In March, xAI introduced its latest AI model, Known as “Grok-1.5”.

The news follows reports in January that xAI was in talks. Raise $6 billion. with a target of reaching a valuation of $20 billion. Musk previously denied reports that xAI had raised $500 million and that the firm was eyeing a valuation of $15 billion to $20 billion.

Last month, Musk announced that xAI would open source Grok, a move that some say could democratize AI technology and spur innovation in commercial applications. It’s an effort amid continued criticism of Musk. Legal action against OpenAI Due to its lack of transparency with AI models.

“Open source models can. Lead to more competition And, potentially, lower costs for businesses leveraging AI in their operations. Richard GardnerCEO of Tech Consultancy Modulus, told PYMNTS in an interview. “As the underlying models become more accessible, competition may shift to the quality of the data used to train them and the expertise in applying those models to solve specific business problems.”

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