Elon Musk's artificial intelligence company xAI said Sunday it has raised $6 billion, helping close the funding gap with OpenAI, Anthropic and other rivals in the red-hot sector.
The funds would be used “to bring xAI's first products to market, build advanced infrastructure, and accelerate research and development of future technologies,” the company said in a statement.
Musk, who founded xAI in July, said in a social media post that the funding round valued the company at $18 billion, not including new money. Investors included Silicon Valley heavyweights Andreessen Horowitz and Sequoia Capital, along with Prince Alwaleed bin Talal of Saudi Arabia.
Investors and big tech companies like Google, Meta and Microsoft have poured billions into companies developing artificial intelligence systems, seeking to profit as they are integrated into many aspects of business and daily life. These investments also reflect the high costs of operating generative AI systems, which require enormous amounts of processing power to generate text, sound and images.
In a recent research report on the latest developments in artificial intelligence, Deutsche Bank analysts noted that “constant improvements to already astonishingly powerful generative AI models show how the technology has quickly become table stakes for industry leaders. sector”. They said major industry players cannot “afford to be left behind in the early stages before market positions are consolidated”.
OpenAI, which unveiled the ChatGPT chatbot in late 2022, has roughly tripled its valuation over the past year or so to $80 billion, with about $13 billion in backing from Microsoft. Anthropic, founded in 2021, has raised about $8 billion, largely from Amazon, and has reached a valuation of about $15 billion. Tech giants like Google and Meta have also invested heavily in their own AI technologies, which are rapidly being incorporated into their product lines.
(The New York Times sued OpenAI and its partner, Microsoft, in December, alleging copyright infringement of news content related to artificial intelligence systems.)
Musk, who also runs Tesla, SpaceX and other businesses, co-founded OpenAI in 2015 but later parted ways with the company because he was disillusioned with its direction and the AI industry in general.
In March it sued OpenAI and its CEO, Sam Altman, accusing them of breaching a contract by putting profits and commercial interests in the development of artificial intelligence before the public good. In the same month, Musk released the raw computer code behind the xAI chatbot, an escalation in the heated debate over whether open-sourcing the code of these systems could make them more secure or invite misuse.
Last week, during a remote appearance at a technology conference in Paris, Musk said that xAI “still has a lot of catching up to do” to be competitive with technology from OpenAI and Google. “Maybe towards the end of this year we will have it.”