With artificial intelligence (AI) sector booming, Elon Musk’s xAI is making strides toward its ambitious $1 billion funding target. Bloomberg noted in its report on Friday that the AI venture has secured $500 million in commitments from investors.
xAI is reportedly in discussions regarding a valuation ranging from $15 billion to $20 billion. Sources told the paper that these terms could undergo adjustments in the coming weeks.
Elon Musk’s xAI could close funding next week
With the anticipation of finalizing the funding terms next week, the report underlined that some parties are contemplating alternative arrangements. This could involve computing power alongside, or even instead of, equity shares in xAI.
This comes after Elon Musk stated in December that his AI company had no intentions of raising funds. Musk established xAI in July 2023 after raising concerns about the AI efforts undertaken by tech giants.
Other AI ventures advance with the sector
In a parallel move, OpenAI, under CEO Sam Altman, is embarking on its own ambitious venture. Altman seeks to secure billions of dollars for an AI chip venture, with plans to establish a network of semiconductor manufacturing facilities, according to another report from Bloomberg.
Reports indicate that Altman has engaged in discussions with several potential investors.
The manufacturing of chips, critical components for AI applications, is renowned for its high costs and substantial consumption of natural resources. Consequently, the financial requirements for such ventures have been escalating over the years as technology advances.
Ongoing funding boom in AI
Despite the cost, the AI industry continues to flourish with its output. Ads featured on Meta Platforms Inc.’s apps have realized a remarkable 32% increase in return on spending, thanks to the integration of artificial intelligence. The paper quoted Nicola Mendelsohn, head of the global business group at Meta Platforms Inc., who revealed the figures.
Top AI ventures, including players like xAI and OpenAI, are pushing the boundaries of AI development and funding, reflecting the ongoing boom in the sector.
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