Elon Musk’s new AI startup could be valued at a higher-than-expected $20 billion in its first funding round, with investor demand surging as the process nears a close, The Post has learned.
Musk’s xAI — which powers the snarky Grok chatbot — could raise between $7 billion and $8 billion at that lofty valuation as it competes with Google’s Gemini AI platform and OpenAI’s ChatGPT, a source with knowledge told The Post.
That would exceed the $6 billion getting raised at an $18 billion valuation reported by Bloomberg earlier this week.
Musk — who launched Tesla, SpaceX, Neuralink and Boring — has asked xAI investors to wire in money by the end of Friday before he closes the window on the first funding round, another source who is investing in xAI said.
“People are asking for a second close so they can put more money in,” the source told The Post on Friday.
Part of the reason for the overwhelming demand has been Musk making a convincing case that he can leverage Tesla’s computing power to help xAI, a second source investing in the round said. The electric vehicles use only 10% of their computing power,
While some money has flowed in from the Middle East, Musk has been careful not to accept cash from China, including Hong Kong, the first source investing in the round said.
Musk spokespeople declined comment.
In February, The Post reported exclusively that Musk was expected to raise funds that could put xAI’s valuation at between $10 billion and $20 billion.
In April, Musk said xAi would need to buy 100,000 Nvidia H100 chips to train the upgraded versions of its chatbot “Grok 3.” The current version, Grok 2, took about 20,000 chips.
Despite months of rumblings, Musk had repeatedly denied that xAI was raising money.
“xAI is not raising capital and I have had no conversations with anyone in this regard,” Musk wrote on X earlier this year.
At the time of Musk’s denial, xAI had already disclosed plans for a fundraise in a regulatory filing. Late last year, xAI said it would raise at least $1 billion through an equity offering.