#News

Date: April 12, 2024

Elon Musk has circulated an open fundraising opportunity of $4 Billion to investors in his xAI startup venture to compete with OpenAI’s service offerings.

Elon Musk has been dominating every industry he touches. From the impressive success of SpaceX and the recent takeover of Twitter, Musk’s aggressive intentions have been set clearly in the eyes of investors. Even after his controversial leadership actions to rename X and remove the blue badges from verified profiles, his startup ventures have gained investors and consumers in great numbers.

Elon Musk has taken another aggressive approach by seeking up to $4 billion in investments for his xAI Fledgling startup venture. The fundraising outreach aims to build enough capital to compete with OpenAI’s ChatGPT through xAI’s Grok chatbot. However, only select investors have been sent the investment pitch deck, which reportedly is 20 pages long and includes critical data about his various businesses. If the fundraising is successful, Musk’s xAI will be valued at an impressive $18 Billion, reaching the top spot in any AI company worldwide.

Musk has also kept the Special Purpose Vehicle investment approach open for investors who cannot meet his requirements. This option allows multiple investors to invest in xAI through a single entity. However, according to reports, there are upfront fees of 5%, management charges, and interest to be added. The high charges make this option least profitable for small and mid-sized investors. Only the ones who can fulfill the entire appetite of $4 Billion will gain the maximum profits from their investments in xAI’s demand.

According to an individual who received one, emails about the potential financing, including the 20-page pitch deck, have been making rounds in the Silicon Valley investor community. People close to Musk are inviting their networks to gauge interest in joining the investment deal. According to the Wall Street Journal, the terms and dollar value of the funding round are variable and could change drastically based on multiple factors. Skepticism around Grok’s scope of matching the capabilities of ChatGPT will also impact investor sentiment.

By Arpit Dubey

Arpit is a dreamer, wanderer, and a tech nerd who loves to jot down tech musings and updates. With a logician mind, he is always chasing sunrises and tech advancements while secretly preparing for the robot uprising.