Watch Out, OpenAI: Elon Musk's xAI Fetches $24B Valuation In Fresh Funding Round With Aim To Achieve AGI 'Next Year'

Tech billionaire Elon Musk's xAI has successfully secured $6 billion in a Series B funding round at a reported post-money valuation of $24 billion.

What Happened: xAI's funding round saw participation from prominent investors such as Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal, and Kingdom Holding.

In a blog post on Sunday, xAI revealed that it has "multiple exciting technology updates and products soon to be announced." Although the company hasn’t disclosed the valuation, a Reuters report pegs it at $24 billion, post-money.

This comes after xAI's multiple updates to the Grok-1 AI model, which now includes long context capability and image understanding. The open-source release of Grok-1 has led to advancements in various applications, optimizations, and extensions of the model.

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The funds raised will be used to bring xAI's first products to market, build advanced infrastructure, and accelerate the research and development of future technologies.

"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 a post.

"There will be more to announce in the coming weeks," said Musk in a post on X, formerly Twitter.

Why It Matters: xAI's $6 billion fundraising comes at a time when the company is reportedly planning to build a supercomputer to compete with Microsoft Corp.-backed OpenAI's $100 billion plans.

However, back in January, Musk denied reports that xAI was raising funds, saying, "I have had no conversations with anyone in this regard."

Musk has also underscored his belief that AI will eventually eliminate the need for human labor. He also thinks artificial general intelligence, or AGI, will be the "most important event" in the world's history, and that we will have AGI by "next year."

xAI’s Grok-1 model has been in the spotlight, with Musk expressing his desire for Grok AI to become the new late-night comedian.

Musk has also used Grok to throw shade at Alphabet Inc.'s Google, which has experienced difficulties with its Gemini AI-powered search that was released in a limited rollout earlier this month.

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