xAI discussing raising funds at $40B valuation: report

Generative artificial intelligence startup xAI is in talks to raise a new funding round that will value the Elon Musk-led company at $40B, The Wall Street Journal reported.

The discussions are said to be in the early stages, the news outlet added, citing people familiar with the matter.

Musk said on Tuesday at the Future Investment Initiative conference that he intended to double the size of xAI, but did not give additional details on how he would do so. xAI did not immediately respond to a request for comment from Seeking Alpha.

If the new funding round comes to fruition at the above valuation, it would mark a significant rise from the $24B that xAI was worth at when it raised $6B in a series B funding round in May.

OpenAI, which competes with xAI, raised $6.6B earlier this month, and valued the Sam Altman-led company at $157B. Musk co-founded OpenAI several years ago, but left the company in 2018 and has previously sued the company.

Last week, xAI released its first application programming interface. The API only has one model, known as “grok-beta.” This model is priced at $5M per million input tokens or $15M per million output tokens

Musk said in July that he would bring the idea of Tesla (NASDAQ:TSLA) investing $5B into xAI to the electric vehicle maker’s board of directors after the idea received nearly two-thirds of “yes” votes in an online poll. He heads up xAI, along with X, Tesla and several other companies.