Elon Musk’s xAI raises US$6 billion from investors including Sequoia, Andreessen Horowitz to challenge OpenAI

Musk launched a rival to OpenAI’s ChatGPT in November, called Grok, which was trained on and integrated into X.com, the social network formerly known as Twitter. That has so far been the most visible product of xAI’s work, which is led by executives with prior experience at Alphabet’s DeepMind, Microsoft and Tesla.

The company intends to use the funds to bring its first products to market, build advanced infrastructure and accelerate the development of future technologies, it said in the blog.

Its pre-money valuation was US$18 billion, Musk said in a post on X. Marquee venture capital names including Sequoia Capital and Andreessen Horowitz backed the fundraising, which is one of the largest so far in the industry.

Microsoft has invested about US$13 billion in OpenAI, while Amazon.com put about US$4 billion into Anthropic.