Still months ahead of its one-year anniversary, Elon Musk’s artificial intelligence startup xAI just announced a fresh infusion of capital via a Series B funding round worth some $6 billion.
In an announcement made over the Memorial Day weekend, xAI said “key investors” participating in the company’s second round of funding include Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company and Prince Alwaleed Bin Talal and Kingdom Holding, among others.
xAI says the new cash will be put to use bringing the company’s “first products to market, build advanced infrastructure and accelerate the research and development of future technologies.” The funding pushes xAI’s valuation to $24 billion.
What is Grok?
The company released a debut version of its Grok chatbot to select users of another Musk tech holding, X (formerly Twitter) last November and has made “significant strides over the past year,” according to the company. Other AI-driven products in the pipeline include the Grok 1.5 model which will feature “long context capability” and Grok 1.5V with “image understanding.”
Grok is a term coined by Robert Heinlein in his seminal 1961 science fiction novel “Stranger in a Strange Land.” In Heinlein’s book, to grok is to empathize so deeply with others that you merge or blend with them, according to Vocabulary.com. The simplest way to think of grok is as truly, deeply understanding someone or something.
xAI is not Musk’s first foray into AI startups, as he was among the co-founders of OpenAI, the company behind popular platforms like the ChatGPT chatbot, DALL-E image generator and the recently revealed Sora text-to-video tool.
Musk sued OpenAI
Musk parted ways with OpenAI’s leadership in 2018 when he resigned from the company’s board, but had continued investment activity until 2020.
In March, Musk filed a lawsuit against OpenAI claiming the company was in breach of founding agreements that required the company to seek the public good above “the private gain of any person.”
Musk’s suit points to an early agreement among the OpenAI founders, which includes Musk, current OpenAI CEO Sam Altman and Greg Brockman, who is also a named defendant in the filing, that the new endeavor “would be a nonprofit developing (artificial general intelligence) for the benefit of humanity, not for a for-profit company seeking to maximize shareholder profits; and ... would be open-source, balancing only countervailing safety considerations, and would not keep its technology closed and secret for proprietary commercial reasons.”
Musk’s claims against OpenAI and defendants include breach of contract, breach of fiduciary duty and unfair business practice. He is asking the court to compel OpenAI to make all of its research and technology available to the public and prohibit the company, or any of its funding partners, from making money from OpenAI products.
OpenAI vs. xAI
In the meantime, OpenAI is a leader in the race for companies focused on developing AI tools with an $86 billion valuation — a benchmark fueled by heavy investment from technology giant Microsoft that’s funneled around $13 billion to OpenAI since its founding in 2015. Google has reportedly spent tens of billions on AI-focused research, including developments wrought by its in-house DeepMind research team and is incorporating its Gemini chatbot, formerly called Bard, into its suite of products. Google is also a backer of Anthropic, another major player in the AI realm that raised $6 billion in 2023 and is now valued at around $18 billion, according to a report from The Wall Street Journal.
While Musk has pilloried and taken legal action against OpenAi and its strategies for advancing AI-driven tools, xAI is touting a humanitarian bent, albeit one that does not mention limitations on generating profits for its owners and investors.
“xAI is primarily focused on the development of advanced AI systems that are truthful, competent, and maximally beneficial for all of humanity,” the company said in a posting about its Series B funding. “The company’s mission is to understand the true nature of the universe.”