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Musk to raise $6B (from his buddies) for xAI

Musk to raise $6B (from his buddies) for xAI

Musk subpoenas ex-OpenAI board representative

Martin Crowley & Liam Lawson
April 26, 2024

Welcome to AI Tool Report!

Friday’s top story: Elon Musk’s AI company, xAI, is about to close a $6B funding deal, with the majority of its investors coming from Musk’s trusted inner circle.

🎙️ Plus: A podcast episode has just launched: Go listen to “Leadership in the AI age” with Tak Lo, founder of Zeroth.ai.

🌤️ This Morning on AI Tool Report

🧑‍🤝‍🧑 Musk to raise $6B (from his buddies) for xAI
🤖 Humanoid robot learns tasks in 24hrs
📃 Musk subpoenas ex-OpenAI board representative
🤑 Microsoft exceeds $61B in revenue thanks to AI

Read Time: 5 minutes

AI STOCKS

FUNDING

🧑‍🤝‍🧑 Musk to raise $6B (from his buddies) for xAI

Musk’s XAI to raise $6B from his friends

Our Report: Elon Musk’s AI company, xAI, is raising $6B in funding (at a valuation of $18B), giving investors a 25% stake in the company, in a deal expected to close over the next few weeks, if the conditions don’t change (which they have, once, already).

🔑 Key Points:

Initially, Jared Birchall—head of Musk's family office—told prospective investors that xAI was raising $3B at a valuation of $15B, but as interest in funding surged, so did the conditions.
Sequoia Capital and Future Ventures (co-founded by Musk's long-term associate, Steve Jurvetson) are rumored to be heavily participating in the funding round.
Other potential contributors thought to be investing in xAI, include Valor Equity Partners and Gigafund, whose founders are also part of Musk’s inner circle of close acquaintances.

🤨 Why you should care: It’s thought that xAI will use this funding to advance its goal of “connecting the digital and physical worlds” by leveraging training data from each of Musk's ventures, including Tesla, The Boring Company, SpaceX, and Neuralink.

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ROBOTICS

🤖 Humanoid robot learns tasks in 24hrs

Robotics startup—Sanctuary AI—has revealed the 7th generation of its humanoid robot, Phoenix, which learns tasks in 24hrs and has an improved, human-like, range of motion.
In a week-long pilot, Phoenix worked at a retail store and—with its increased range of motion in the wrists, hands, elbows, and hands—successfully completed over 110 retail tasks.
Sanctuary AI can also build this next-gen robot quicker than previous versions and has lowered manufacturing costs, making it a more viable option for companies to commission.

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LAWSUITS

📃 Musk subpoenas ex-OpenAI board representative

As part of his lawsuit against OpenAI (for deviating from its mission of developing AI for humanity) Musk has issued ex-OpenAI board representative—Helen Toner—with a subpoena.
He’s demanding she hand over documents and communications related to her exit from the board, and CEO Sam Altmans firing and re-hiring, as she played a central part in this.
This comes after Toner recently said AI companies should “share information about what their systems can do”, reportedly resurfacing an ongoing feud between her and Altman.

STOCK MARKETS

🤑 Microsoft exceeds $61B in revenue thanks to AI

Microsoft’s earnings have soared, with total revenue increasing by 17% to $61.86B during the first three months of 2024, exceeding Wall Street analyst expectations.
This is largely because it’s invested billions into AI in a bid to supercharge its growth, particularly in its cloud computing services, which saw a 20% surge in revenue.
With a stock market value of nearly $3 trillion—with shares in the firm increasing by over 30% over the past year—Microsoft is officially the world’s largest public company.