- Elon Musk’s xAI, a large-scale artificial intelligence model company, is set to complete its latest round of financing, with Sequoia Capital being one of the main investors.
- The funding round amounts to $6 billion, with a post-investment valuation of up to $18 billion, and is expected to be completed within two weeks.
- xAI, which has been established for only 10 months, has already received favor from many investment institutions in succession.
xAI is a new company working on building artificial intelligence to accelerate human scientific discovery, whose mission is to advance collective understanding of the universe. Established just 10 months ago, xAI has gained significant interest from investors.
Funding journey of xAI
In March 2023, Elon Musk registered xAI in Nevada, laying the foundation for its operations.
In November 2023, xAI raised nearly $135 million in its first round of financing from four investors, indicating early confidence in the company’s vision and potential.
In December 2023, according to the SEC website, xAI submitted an application to raise $1 billion through equity financing, with investors from X company expected to hold a 25% stake in xAI.
In April 2024, xAI is in the midst of negotiations with investors for its latest funding round, aiming to raise $3 billion. This round of financing, if successful, would propel xAI’s valuation to an impressive $18 billion.
Also read: Musk’s xAI to launch an improved version of the chatbot Grok
xAI’s founding team
The core team consists of 11 members, led by Elon Musk, and the members have previously worked at DeepMind, OpenAI, Google Research, Microsoft Research, Tesla, and the University of Toronto. The team is advised by Dan Hendricks, the current Director of the AI Safety Center. These 11 members are Igor Babuschkin, Kyle Kosic, Ross Nordeen, Toby Pohlen, Jimmy Ba, Christian Szegedy, Manuel Kroiss, Yuhuai (Tony) Wu, Greg Yang, Zihang Dai, and Guodong Zhang.
The backgrounds of xAI team members are closely related to mathematics, physics, and computer science, with several individuals transitioning into the field of artificial intelligence from a research foundation in basic mathematics and physics. From the composition of the xAI team, it is evident that Google DeepMind has contributed the majority of the team’s expertise, with 7 out of the 11 members having previously worked at DeepMind. The remaining four members come from Microsoft, Tesla, OpenAI, and academia, respectively.
Also read: Elon Musk denies xAI funding speculation, says not seeking capital
Key venture capital firms investing in xAI
Elon Musk’s AI startup xAI is raising $6 billion at a valuation of $18 billion, according to a report by The Information. The funding round will see participation from Sequoia Capital and Future Ventures, the venture capital fund started by Musk’s friend and SpaceX board member, Steve Jurvetson. The deal is expected to close within the next few weeks. Other participants include Valor Equity Partners and Gigafund, who are also a part of Musk’s inner circle.
Sequoia Capital has been highlighted across multiple reports as a key investor in this round. As early as 2021, Sequoia America began to invest in OpenAI, investors have given a valuation of $20 billion to buy shares, the current valuation of OpenAI is about 54 times ARR.
Sequoia is also an investor in Musk’s SpaceX and previously helped Musk acquire Twitter (now known as X) for $44 billion.
