Elon Musk’s AI startup — X.AI — files to raise $1 billion in fresh capital

X.AI,
an
artificial
intelligence
startup
founded
by

Elon
Musk,
has
filed
with
the
SEC
to
raise
up
to
$1
billion
in
an
equity
offering.

The
company
has
already
brought
in

nearly
$135
million
from
four
investors,
with
the
first
sale
occurring
on
Nov.
29,
and
has
a
“binding
and
enforceable
agreement”
for
the
purchase
of
the
remaining
shares,
the
filing
says.

The
AI
startup,
which
Musk announced
in
July,
seeks
to
“understand
the
true
nature
of
the
universe,”
according
to
its
website.
Last
month,
X.AI
released
a
chatbot
called
Grok,
which
the
company
says
is
modeled
after
“The
Hitchhiker’s
Guide
to
the
Galaxy.”
The
chatbot
debuted
with
two
months
of
training
and
has
real-time
knowledge
of
the
internet,
the
company
claims.

“Grok
is
designed
to
answer
questions
with
a
bit
of
wit
and
has
a
rebellious
streak,
so
please
don’t
use
it
if
you
hate
humor!”
X.AI
wrote
on
its
website,
adding,
“It
will
also
answer
spicy
questions
that
are
rejected
by
most
other
AI
systems.”

The
company
didn’t
immediately
respond
to
a
request
for
comment.

With
Grok,
X.AI
aims
to
directly
compete
with
companies
including
ChatGPT
creator
OpenAI,
which
Musk
helped
start
before
a
conflict
with
co-founder
Sam
Altman
led
him
to
depart
the
project
in
2018.
It
will
also
be
vying
with


Google’s
Bard
technology
and
Anthropic’s

Claude
chatbot.

Earlier
this
year,
Musk reportedly
secured thousands
of
high-powered
graphics
processing
units
(GPUs)
from Nvidia,
the
kind
of
chips
necessary
to
build
a
large
language
model.

X.AI
is
one
of
many
companies
owned
or
led
by
Musk.
In
addition
to
his
control
of
X,
previously
Twitter,
which
he
purchased
last
year,
Musk
is
CEO
of


Tesla
and
SpaceX.
He
also
operates
underground
tunnel
developer

Boring
Company
and
brain-tech
startup

Neuralink.

Last
month,
Musk
said
investors
in
X
(formerly
Twitter)
would

own
25%
of
X.AI.

“We
are
a
separate
company
from
X
Corp,
but
will
work
closely
with
X
(Twitter),
Tesla,
and
other
companies
to
make
progress
towards
our
mission,”
X.AI
says
on
its
website.

People
working
on
X.AI
include
alumni
of
DeepMind,
OpenAI,
Google
Research, Microsoft Research,
Twitter
and Tesla.
They’ve
worked
on
projects
including
DeepMind’s
AlphaCode
and
OpenAI’s
GPT-3.5
and
GPT-4
chatbots,
according
to
LinkedIn
profiles.

Musk
incorporated
X.AI
in
Nevada
in
March,
according
to
filings.

On
a
Tesla
earnings
call
in
July,
here’s
what
Musk
told
analysts
wondering
about
whether
X.AI
may
compete
with
any
of
Tesla’s
business:

“There
were
just
some
of
the
world’s
best
AI
engineers
and
scientists
that
were
willing
to
join
a
startup
but
they
were
not
willing
to
join
a
large,
sort
of
relatively
established
company
like
Tesla,”
he
said.
“So
I
was
like,
OK
well,
better
it’s
a
startup
that
I
run
than
they
go
work
somewhere
else.
That’s
kind
of
the
genesis
of
X.AI.”

For
X.AI’s
financing,
the
date
of
the
initial
sale
coincided
with
Musk’s

appearance
at
the
2023
DealBook
Summit,
where
he
told
advertisers
who
had
suspended
campaigns
on
X
to
“go
f***
yourself.”
Dozens
of
advertisers
had
stopped
spending
on
X
after
Musk
posted
and
amplified
antisemitic
comments.

—
CNBC’s
Lora
Kolodny
contributed
to
this
report

WATCH:

Elon
Musk’s
X.AI
launches
‘Grok’