Elon Musk’s artificial intelligence company xAI has raised $15 billion from investors, a person familiar with the matter tells CNBC’s David Faber.
Musk later called the news “false” in a post on his social media platform X.
The funding adds another $5 billion to a $10 billion round that CNBC reported in September that valued the startup at $200 billion. Officials told CNBC that the bulk of the money will go toward funding graphics processing equipment that will support large-scale language models.
Artificial intelligence startups have reached sky-high valuations in recent months, raising huge sums of money to fuel seemingly endless demand for their underlying models.
In September, AI startup Anthropic closed a $13 billion funding round, nearly tripling its valuation since March.
Sam Altman’s OpenAI completed a $6.6 billion stock sale in October at a valuation of $500 billion. Last month, Reuters reported that the ChatGPT maker was preparing for an IPO that could reach a valuation of $1 trillion.
Mr. Musk’s AI ventures have repeatedly caused controversy, including the rapid construction of a massive, power-hungry data center in Memphis.
Local researchers say the data center uses natural gas-fired turbines for power, and emissions from it are contributing to local air quality problems.
XAI also creates a chatbot called Grok and recently launched a site called Grokipedia, an online encyclopedia comparable to Wikipedia.
Both Grok and Grokipedia have drawn widespread criticism for generating and spreading false content and, in some cases, anti-Semitic and other hate speech.
XAI acquired social network X in an all-stock deal in March, valuing the platform at $33 billion.
Musk’s automaker Tesla also does business with xAI.
The infotainment systems in new Tesla cars are powered by Grok. Meanwhile, xAI purchased tens of millions of dollars worth of Tesla battery energy storage systems for use in its Memphis data center.
Tesla held its annual shareholder meeting and proxy voting last week. Investors voted to approve Mr. Musk’s CEO pay plan, which could net them about $1 trillion in Tesla stock over the next decade, depending on what milestones the company hits.
A shareholder proposal to allow Tesla to invest in xAI was also subject to a proxy vote. There were not enough votes in favor of investing in xAI for Tesla’s board to move forward with the deal.
Brandon Ehrhart, Tesla’s general counsel and corporate secretary, said at the company’s annual meeting that the company is “considering next steps on this issue.”
