Elon Musk has refuted the veracity of a report that stated investors gave his artificial intelligence (AI) startup, xAI, $500 million out of a $1 billion target.
Musk said, “This is not accurate,” citing a Bloomberg report in response to a user’s message on X (previously Twitter).
Bloomberg reported sources stating that xAI is discussing a valuation between $15 billion and $20 billion, with possible revisions in the upcoming weeks.
It is said that Musk and investors will finalise the conditions in the upcoming weeks, and they are now debating whether to acquire processing power in addition to or instead of xAI equity shares.
Musk stated in November 2023 that X equity investors would receive a 25% ownership share in xAI. According to Bloomberg, this suggests that these investors are urged to put at least 25% of the money they put into X into xAI. They are welcome to invest $2.5 billion or more in xAI, for example, if they spent $10 billion in X.
Musk founded xAI in 2023 as a rival to OpenAI, with which he disagreed philosophically. Grok, a chatbot developed by xAI, is fed social media content from X.
A filing made on December 5, 2023, with the US Securities and Exchange Commission states that the AI modeller xAI closed a deal for the unregistered equity securities private sale for $865.3 million.
The stocks will be sold to accredited investors, subject to resale restrictions under Rule 506(b), according to the xAI Form D. According to the statement, securities worth $134.7 million have already been sold, with the first transaction taking place on November 29, 2023.