May 29, 2024
Elon Musk's xAI Seeks $1 Billion in Private Sale
Policy & Regulation

Elon Musk’s xAI Seeks $1 Billion in Private Sale

Elon Musk’s artificial intelligence modeller, xAI, has agreed to the private sale of $865.3 million in unregistered equity securities, according to a filing with the United States Securities and Exchange Commission (SEC) on December 5. Musk, listed as the executive officer and director, is at the forefront of this fundraising endeavour, with the ultimate goal of raising $1 billion.

xAI filed the SEC’s Form D, utilizing Regulation D of the Securities Act of 1933 to engage in the private sale of securities without the need for registration. The filing specifies that the securities will be sold to accredited investors with restrictions on resale under Rule 506(b). As of the filing date, $134.7 million in such securities have already been sold, with the initial sale occurring on November 29.

The focal point of xAI’s offerings is its chatbot named Grok, which is yet to make its public debut. However, there is a waitlist for users eager to experience the prototype. Described on its website as “a very early beta product,” Grok boasts a unique advantage of real-time knowledge of the world via the X platform (formerly Twitter). The chatbot also claims to answer spicy questions rejected by most other AI systems.

Elon Musk announced the launch of xAI in July, emphasizing its goal to “understand the universe.” Musk boldly claimed that Grok would outperform ChatGPT, leading to a public exchange in November with OpenAI’s co-founder and CEO, Sam Altman. Musk, having been a co-founder of OpenAI, eventually parted ways with the company.

The private sale of securities indicates a significant step in xAI’s fundraising efforts, with the promise of substantial capital to further develop and promote its innovative AI technologies.

Image: Wallpapers.com

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