xAI, Elon Musk’s OpenAI rival that’s only 10 months old, is on the verge of securing $6 billion in funding based on a pre-money valuation of $18 billion, as per a reliable source involved in the deal. This deal, which would offer investors a 25% stake in the company, is anticipated to be finalized in the coming weeks unless there are changes in the deal’s terms.

The terms of the deal have already been revised once. Just last weekend, Jared Birchall, the head of Musk’s family office, was informing potential investors that xAI was seeking to raise $3 billion at a $15 billion pre-money valuation. However, due to the overwhelming interest from investors, these figures were promptly revised. According to our source, all the investors received an email stating, ‘The deal is now $6B at an $18B valuation, and don’t complain because there are many others who want in.’ Investors who have been vying for a piece of the deal for months didn’t seem to mind the change. Sequoia Capital and Future Ventures, the venture fund co-founded by Musk’s longtime friend Steve Jurvetson, are among those participating in the round. Other likely participants include Valor Equity Partners and Gigafund, both of which have founders who are part of Musk’s close-knit circle, known for blurring the lines between personal and professional relationships. (Attempts to reach these investors were unsuccessful; xAI does not have a press department.)

Jurvetson, who is on the board of SpaceX and was a director at Tesla until 2020, and Gigafund co-founder Luke Nosek, who co-founded Founders Fund with investor Peter Thiel and was the first venture investor to back SpaceX, are among the key players. Antonio Gracias, the founder of Valor and one of the earliest investors in Tesla, is also a former Tesla director and currently sits on the board of SpaceX.

Last month, Musk made the architecture of x AI’s earliest chatbot, ‘Grok-1,’ open source, meaning anyone can now download and modify it. This move is part of his ongoing effort to differentiate his initiatives from OpenAI, which has kept its proprietary technology under wraps and is now being sued by Musk. We will follow up on this story and report back as and when it becomes available.

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Keywords: #ainews #artificialintelligence #elonmusk #tesla