Elon Musk recently hinted at a potential major valuation adjustment for his artificial intelligence startup, xAI, during an investor call. The Tesla and SpaceX CEO expressed his intention to establish a “proper value” for the company, sparking speculation about a potential capital raise in the near future. The report was first shared by CNBC’s David Faber on the Faber Report.
Speculation Surrounding Investor Call
According to sources familiar with the call, Musk did not explicitly mention a new funding round. However, his comments about determining a “proper valuation” for xAI led some to believe that the company might be gearing up for a significant capital raise. Faber shared insights from the call, highlighting discussions about the recent closure of the X transaction. xAI, which previously had a valuation of up to $80 billion, merged with X, resulting in a combined valuation of $33 billion.
“On the call, Musk mentioned putting a proper value on the company in reference to xAI, leading some to speculate about a potential large capital raise in the future,” Faber reported.
Growth and Ambitions of xAI
xAI, which was launched in July 2023, introduced its Grok chatbot to compete with other AI models like Anthropic’s Claude and OpenAI’s ChatGPT. In a strategic move, Musk merged xAI with X in March, emphasizing the intertwined futures of the two entities. By combining X’s data resources with xAI’s technology, the merger aims to enhance the company’s competitive position in the AI market.
One of xAI’s notable achievements includes the rapid deployment of Colossus, a supercomputer cluster consisting of 100,000 GPUs, in just 122 days. The company’s speed and efficiency have allowed it to expand Colossus to 200,000 GPUs, with plans for further expansion in the pipeline.