Musk's xAI raises $6 billion in fresh funding from Fidelity, Sequoia Capital and others

By Barbara Kollmeyer

Elon Musk's xAI company has raised $6 billion in a series B round of funding from investors including Fidelity Management & Research Co. and venture-capital firm Sequoia Capital.

In a blog post on Sunday, the artificial intelligence company said Valor Equity Partners, Vy Capital, Andreessen Horowitz, Saudi Arabia's Prince Alwaleed Bin Talal and Kingdom Holding, among others, also invested in the round.

"The funds from the round will be used to take xAI's first products to market, build advanced infrastructure, and accelerate the research and development of future technologies," the company said.

"xAI is primarily focused on the development of advanced AI systems that are truthful, competent, and maximally beneficial for all of humanity. The company's mission is to understand the true nature of the universe," the company said in the blog.

On his social-media X platform, Musk said "pre-money valuation" - the equity valued of a startup ahead of any fundraising - for xAI was $18 billion. He added that there would be "more to announce in coming weeks."

The Tesla (TSLA) CEO's AI company was launched last year as an alternative to OpenAI, which Musk helped found and later left. He sued OpenAI in March, arguing the company and its leaders had put profit over humanity, particularly after a partnership with Microsoft Corp. (MSFT).

Read: Tesla is raising compensation for AI engineers as talent war heats up, says Elon Musk

Musk's xAI released Grok, a rival to ChatGPT in November and offered it to X subscribers, also sharing it as "open source" software in March.

Opinion: Why is Elon Musk suing Open AI and Sam Altman? In a word: Microsoft.

-Barbara Kollmeyer

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05-27-24 0341ET

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