xAI, the artificial intelligence startup founded by tech mogul Elon Musk, has filed with the Securities and Exchange Commission (SEC) to raise $1 billion in an equity offering.
The company has already secured nearly $135 million from four investors, with the first sale on November 29. According to the filing, xAI has a “binding and enforceable agreement” to purchase the remaining shares.
The AI startup, introduced by Musk in July, aims to “understand the true nature of the universe,” as stated on its website. Recently, xAI unveiled a chatbot named Grok, inspired by “The Hitchhiker’s Guide to the Galaxy,” claiming real-time knowledge of the internet after two months of training.
xAI faces competition from companies such as OpenAI, the creator of ChatGPT, in which Musk was involved before departing in 2018.
The startup competes with Google’s Bard technology and Anthropic’s Claude chatbot. Musk reportedly secured thousands of high-powered graphics processing units (GPUs) from Nvidia earlier this year, which is crucial for building large language models like those employed by xAI.
Elon Musk is deeply involved in various ventures, including xAI, Twitter (which he purchased last year), Tesla, SpaceX, the Boring Company, and Neuralink. According to Musk’s previous statements, investors in xAI, formerly Twitter, are expected to own 25 percent of the company.
xAI’s team comprises individuals with backgrounds at renowned organizations like DeepMind, OpenAI, Google Research, Microsoft Research, Twitter, and Tesla. They have worked on projects including DeepMind’s AlphaCode, OpenAI’s GPT-3.5, and GPT-4 chatbots.
Musk incorporated xAI in Nevada in March, and on a Tesla earnings call in July, he explained that the startup’s genesis was driven by the availability of top AI talent more willing to join a startup than a more extensive, established company like Tesla.