Elon Musk's startup xAI in talks with investors to raise $3 billion

There are discussions going on between investors closely linked to Elon Musk and xAI, his artificial intelligence startup, aimed at raising a significant $3 billion investment. This potential funding round could skyrocket the valuation of xAI to a staggering $18 billion. While the terms of this fundraising initiative have yet to be finalised, and the plans are subject to potential alterations, recent discussions have reportedly gained considerable momentum.

Among those contemplating backing this endeavour are the renowned venture capital firm Gigafund and Steve Jurvetson. A source even hints at the involvement of a co-founder from another venture firm, although the specific identity of both the individual and the firm remains undisclosed.

This move by Musk comes as a strategic decision to offer a formidable alternative to industry giants like Microsoft-backed OpenAI and Alphabet's Google. xAI was inaugurated by Musk last year with the aim of pushing the boundaries of artificial intelligence.

On the contrary, earlier this year, Musk however stated that xAI was not engaged in discussions with investors regarding funding, refuting media speculations about the startup potentially securing up to $6 billion in investment.

These conflicting reports have sparked ongoing interest and speculation in the technology and investment communities.

In another development, March saw the unveiling of an upgraded version of xAI's chatbot, Grok, now known as Grok-1.5, posing a significant challenge to OpenAI's ChatGPT. The chatbot has been made accessible to select users of X.