Elon Musk’s xAI valued at $24bn after funding from Andreessen Horowitz, Sequoia Capital

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Elon Musk’s artificial intelligence (AI) startup xAI raised $6bn in series B funding, reaching a post-money valuation of $24bn as investors bet big on challengers to companies like OpenAI in the intensifying AI race.

The funding round was backed by investors including Andreessen Horowitz and Sequoia Capital, the company said in a blog post on Sunday.

The AI firm highlighted its announcements in the past year which include – the release of Grok-1 on X in November, to the recent announcements of the improved Grok-1.5 model with long context capability, to Grok-1.5V with image understanding, saying its “xAI’s model capabilities have improved rapidly.”

The company’s pre-money valuation was $18bn, Musk said in a post on X.

xAI is pleased to announce..https://t.co/uu0ioPgS8V

— xAI (@xai) May 27, 2024

The money will be used to take xAI‘s first products to market, build advanced infrastructure and accelerate research and development of future technologies, xAI said.

“There will be more to announce in the coming weeks,” Musk said in another X post, in response to the announcement of the funding.

Musk had denied a report earlier this year that said xAI was seeking funding.

Representatives for Musk and the investment firms did not immediately respond to Reuters requests for comment.

The AI race

Companies like Microsoft backed OpenAI and Alphabet’s Google are among those leading the fierce race for generative AI dominance, driving significant investments and innovation in the rapidly evolving landscape.

AI startups raised $19.15bn in venture capital funding in the first quarter, compared with $16.36bn in the year-ago period, according to data from PitchBook.

Read: Elon Musk unveils AI-bot ‘Grok’, announces plan to integrate xAI with his social media platform