Elon Musk Refutes xAI $500 Million Funding Report, Labels It 'Fake News'

By Jace Dela Cruz

Jan 20, 2024 02:47 AM EST

Elon Musk has taken to social media to deny a report claiming that his artificial intelligence (AI) startup, xAI, has secured $500 million in commitments from investors toward a $1 billion goal. 

Elon Musk
X (formerly Twitter) CEO Elon Musk laughs during an in-conversation event with Britain's Prime Minister Rishi Sunak in London on November 2, 2023, following the UK Artificial Intelligence (AI) Safety Summit.

Elon Musk Denies Bloomberg's xAI Funding Report

Elon Musk said on X, formerly known as Twitter, that the Bloomberg report was "fake news." In a reply to a user post about the article on X, he also said, "This is simply not accurate." 

Citing people familiar with the matter, Bloomberg reported that xAI is discussing a valuation of $15 billion to $20 billion, but terms could still change in the coming weeks.

Currently, Reuters reported that xAI has yet to provide any statements on the matter. According to Bloomberg, the finalization of terms between Musk and investors is expected in the next few weeks. 

Some parties are reportedly evaluating whether to obtain computing power in addition to, or instead of, xAI equity shares. 

READ ALSO: Elon Musk Seeks 25% Voting Power at Tesla Before Pursuing AI and Robotics

xAI of Elon Musk 

Last December, Elon Musk said his AI company was not raising funds, a day after xAI filed with the US Securities and Exchange Commission (SEC) to raise up to $1 billion in funding from equity investors.

The company, created by Musk in July to compete with other generative AI firms, has already secured approximately $135 million from four investors, with the first transaction occurring on November 29.

xAI, with a stated mission to "understand the true nature of the universe," has introduced a chatbot named Grok inspired by "The Hitchhiker's Guide to the Galaxy." 

The chatbot was developed with two months of training and boasts real-time internet knowledge. xAI positions Grok to compete with other AI players like OpenAI, the creator of ChatGPT, and Google's Bard technology.

READ MORE: Elon Musk's X to Introduce Peer-to-Peer Payments This Year

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