Elon Musk’s AI start-up — X.AI — files to raise $1 billion in fresh capital

X.AI, an artificial intelligence start-up founded by Elon Musk, has filed with US regulators to raise up to $US1 billion ($1.53b) in an equity offering. The company has already brought in nearly $US135 million from four investors, with the first sale occurring on November 29, and has a “binding and enforceable agreement” for the purchase of the remaining shares, the filing says. The AI start-up, which Musk announced in July, seeks to “understand the true nature of the universe”, according to its website. Last month, X.AI released a chatbot called Grok, which the company says is modeled after The Hitchhiker’s Guide to the Galaxy. The chatbot debuted with two months of training and has real-time knowledge of the internet, the company claims. “Grok is designed to answer questions with a bit of wit and has a rebellious streak, so please don’t use it if you hate humor!” X.AI wrote on its website, adding, “It will also answer spicy questions that are rejected by most other AI systems.” The company didn’t immediately respond to a request for comment. With Grok, X.AI aims to directly compete with companies including ChatGPT creator OpenAI, which Musk helped start before a conflict with co-founder Sam Altman led him to depart the project in 2018. It will also be vying with Google’s Bard technology and Anthropic’s Claude chatbot. Earlier this year, Musk reportedly secured thousands of high-powered graphics processing units from Nvidia, the kind of chips necessary to build a large language model. X.AI is one of many companies owned or led by Musk. In addition to his control of X, previously Twitter, which he purchased last year, Musk is CEO of Tesla and SpaceX. He also operates underground tunnel developer Boring Company and brain-tech startup Neuralink. Last month, Musk said investors in X (formerly Twitter) would own 25 per cent of X.AI. “We are a separate company from X Corp, but will work closely with X (Twitter), Tesla, and other companies to make progress towards our mission,” X.AI says on its website. People working on X.AI include alumni of DeepMind, OpenAI, Google Research, Microsoft Research, Twitter and Tesla. They’ve worked on projects including DeepMind’s AlphaCode and OpenAI’s GPT-3.5 and GPT-4 chatbots, according to LinkedIn profiles. Musk incorporated X.AI in Nevada in March, according to filings. On a Tesla earnings call in July, here’s what Musk told analysts wondering about whether X.AI may compete with any of Tesla’s business: “There were just some of the world’s best AI engineers and scientists that were willing to join a startup but they were not willing to join a large, sort of relatively established company like Tesla,” he said. “So I was like, OK well, better it’s a startup that I run than they go work somewhere else. That’s kind of the genesis of X.AI.” For X.AI’s financing, the date of the initial sale coincided with Musk’s appearance at the 2023 DealBook Summit, where he told advertisers who had suspended campaigns on X to “go f*** yourself.” Dozens of advertisers had stopped spending on X after Musk posted and amplified antisemitic comments. CNBC