Elon Musk denies reports of xAI seeking capital investment

Elon Musk clarified on Friday that his artificial intelligence firm, xAI, is not engaged in discussions with investors to raise capital, contrary to a media report earlier in the day suggesting efforts to secure up to $6 billion. 

Musk took to X to affirm, “xAI is not raising capital, and I have had no conversations with anyone in this regard.”

The Financial Times had reported that xAI was in discussions to secure funding at a valuation of $20 billion. 

According to sources familiar with the matter cited by the FT, the startup is engaged in talks with family offices in Hong Kong and is targeting sovereign wealth funds in the Middle East.

The competition in the AI arena has intensified, with numerous investors committing major funds to startups capitalising on Silicon Valley's growing interest in the field.

Musk's office did not respond to a Reuters request for comment. Last week, Musk refuted a report claiming that xAI had garnered $500 million in commitments from investors toward a $1 billion funding target.

While Musk has been vocal about his commitment to developing safer AI, he co-founded OpenAI in 2015 but stepped down from its board in 2018. Last year, xAI launched "Grok," a chatbot intended to rival OpenAI's ChatGPT.

Musk has also expressed concerns about the development of AI and robotics outside Tesla unless he gains more voting control at the electric-vehicle maker. He stressed his discomfort in steering Tesla towards AI leadership without attaining a 25 per cent voting control.

The AI industry, buoyed by the popularity of ChatGPT, has stood out as a bright spot in a subdued startup funding environment. Anthropic and Microsoft-backed Inflection AI have also secured funding in recent months.

(With Reuters Inputs)