Elon Musk's artificial intelligence startup, xAI, is reportedly seeking to raise up to $6 billion in funding as it continues to compete with OpenAI. According to a report from the Financial Times, xAI is currently in discussions with investors in Hong Kong and the Middle East. The report also mentioned that Morgan Stanley is leading the fundraising efforts, although neither Musk nor Morgan Stanley have commented on the matter.
This news comes just a week after Bloomberg reported that xAI had secured $500 million in funding towards a $1 billion goal. However, Musk denied this report on social media, referring to it as "fake news" without providing further details.
Musk has positioned xAI as a challenger to OpenAI, a company he initially co-founded but left the board of in 2018. Since then, Musk has taken several jabs at OpenAI and its creator, Sam Altman. Musk launched xAI in 2023 and introduced its chatbot, Grok, in the same year.
While Musk aims to compete with OpenAI, Bloomberg reported in December that OpenAI was in talks to raise funding at a valuation of over $100 billion, potentially making it one of the most valuable startups in the US.
The news of xAI's fundraising efforts may also indicate that Musk is focusing more on AI products outside of Tesla. Last week, Musk reportedly gave Tesla's board an ultimatum, demanding 25% voting control or he would halt AI development at the electric car company.
Overall, the report suggests that xAI is actively seeking substantial funding to further establish itself as a competitor to OpenAI, and that Musk is potentially prioritizing AI development outside of Tesla.