Elon Musk’s xAI is looking for $1bn in equity offering

6 Dec 2023

Elon Musk speaking at TED2017. Image: Marla Aufmuth/TED Conference/Flickr (CC BY-NC 2.0)

A recent SEC filing suggests xAI already has an agreement to secure $1bn, as it continues work on its Grok chatbot to enter the generative AI market.

xAI, the AI start-up founded by Elon Musk, aims to raise $1bn in fresh capital while it grows Grok, its challenger to AI models like ChatGPT.

The company is raising this capital through an equity offering, according to a filing xAI made to the US Securities and Exchange Commission (SEC). This filing suggests that xAI has already raised more than $134m of its goal. The minimum amount accepted from any outside investor is $2m.

The filing also suggests xAI may already be on track to secure the full amount, as it states that the company has entered into a “binding and enforceable agreement” for the purchase and sale of the remaining $865m to be sold.

xAI had been in the works for several months now before details of the company emerged in a state filing in March, when Musk incorporated the company in Nevada.

It appeared to be made as a way for Musk to enter the generative AI race and challenge companies in this sector, such as OpenAI, the creator of ChatGPT. Previously, Musk was a critic of AI technology and described it as “our biggest existential threat” in 2014.

More details about xAI were revealed in July when it officially launched, but the company’s purpose remained vague. Its website said it aimed to “understand the true nature of the universe”. Musk claimed in a post earlier this year that the aim of the company is to “understand reality”.

The work of xAI became clearer last month when it unveiled Grok, an AI chatbot with a “rebellious streak”. xAI claims this chatbot is designed to answer questions with “a bit of wit” and that it will also answer “spicy questions” that most would be rejected by other AI systems.

Musk claims Grok will be integrated into X, the website formerly known as Twitter. In a post on X last month, he said this roll-out will happen in “blocks of users” and that priority will be given based on when a user signed up for X’s premium subscription.

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Elon Musk speaking at TED2017. Image: Marla Aufmuth/TED Conference via Flickr (CC BY-NC 2.0)

Leigh Mc Gowran is a journalist with Silicon Republic